FTSE 100 Treading Water as Support and Time on Collision Course
- FTSE 100 thoroughly testing support
- June/’Brexit’ trend-line could soon be in confluence
- An interesting point in time is nearly upon us
What’s driving European equity markets? Find out in our market forecasts.
Since last discussing the FTSE 100 on Friday, not much has changed. The index continues to try and gain its footing on the area surrounding 7400. An area of support we’ve discussed at length in previous posts. But to reiterate – the zone surrounding this whole-figure is made up of a trend-line dating back to the 2013 peak crossing over the 2015 high and became influential again back in January where it acted as resistance until May. The subsequent peaks from earlier in the year around this long-term trend-line have also become points of interest as support.
The second half of the month we’ve seen the footsie spend a good amount of time testing the all-important area around 7400. Last week, the remaining two days of the week we saw mini reversals develop at support, with yesterday the market trying to get a lift, but then putting in a mini reversal back lower. What does this all mean? The lack of aggressive buying at a such a big area of support isn’t encouraging and the longer the UK index sits here without popping the more likely support will break.
The June/’Brexit’ trend-line is rising up and will soon be in confluence with the 6/15-day low. The meeting of big support with this key trend-line makes the following days an interesting point in time. A strong hold and turn higher could see the FTSE finally gather the energy needed to forge on back towards record highs. But a clean daily close below noted support and things could turn sour quickly. Indeed, an important juncture is nearly upon us.
FTSE 100: Daily
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.