FTSE 100 Indecisive in Short-term, Long-term Trend Still Clear
- FTSE 100 choppy near-term price action making for tough trading
- Intermediate to long-term outlook remains constructive
- A big-picture bullish outlook warranted until a break in trend develops
How is ‘Brexit’ expected to impact the FTSE 100 and Sterling in Q3? Find out here!
Short-term price action amongst global indices hasn’t been the cleanest as of recent, and when it comes to the FTSE 100 that has been especially true. We’ve seen some sizable daily ranges, but with no lasting moves – stop and reverse. We’ve seen good play in recent months around the 2013 top-side trend-line and have discussed its importance at great length, but even that has become an unreliable source of support or resistance. Pretty soon we’ll be removing it as a relevant technical signpost if the market doesn’t start ‘showing it respect’.
When the chop starts (let’s not forget summer trading conditions are in effect, too) it’s a good idea to dial back a bit and look at the market with the big-picture in mind and slow it down. More broadly speaking, we are still seeing a series of higher highs and higher lows going back to last year, and as long as that continues then the intermediate-term trend remains aligned with the longer-term trend. It won’t be until we see a break in this sequence that we need to be concerned (if bullish) and begin sharpening our bear claws for shorts.
For now, from a longer-term standpoint we’ll remain in the bull-camp until we see price action suggest we should do otherwise. In the short-term, keeping trading light is a prudent approach as the market searches for clarity in summer-lightened trading conditions.
Heads up: Later today we have the FOMC rate announcement, and while the market isn’t expecting a change in rates there could be signaling for the September meeting in the policy statement which could shake up the risk spectrum. This could have an impact on tomorrow’s open. Join Chief Strategist John Kicklighter for live coverage of the announcement.
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.