Skip to content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
FTSE Testing Major Threshold, but Yet to See Rejection

FTSE Testing Major Threshold, but Yet to See Rejection

Paul Robinson, Strategist

What’s inside:

  • FTSE testing major source of resistance
  • But has yet to show forceful rejection
  • Short-term ‘bear-flag’ could help guide

Struggling to gain momentum in your trading? Check out this beginner’s guide – Building Confidence in Trading

Back on the 15th the FTSE cleanly broke key support surrounding the 7300-level, which was viewed as rather significant given it was not only horizontal support with numerous inflection points but also a confirmation of the double-top formation created between June and August and a drop below the 200-day MA. The break of confluence in support also resulted in a lower-low. The rebound since that break, including the boost received on Theresa May’s ‘Brexit’ speech, has the footsie firmly testing this once critical area of support (old support = new resistance). The high of Friday’s rally was notched almost precisely at the 200-day.

The past couple of sessions the market is struggling to overcome resistance as one would expect, but we aren’t yet seeing the type of rejection which is necessarily indicative of a continuation-move lower set to begin. Ideally, for shorts we want to see a firm rejection of key resistance before becoming aggressive. If we don’t soon see a move lower develop then another attempt to recapture 7300 may soon unfold. If it does, though, the market will still face the rising 200-day once again along with a trend-line off the 8/8 high. A break above the trend-line into the upper-7300s would be a solid recapture of resistance and we would be forced to once again view 7300 as support.

FTSE: Daily

Paul conducts webinars Tuesday-Friday. See the Webinar Calendar for details, and the full line-up of upcoming live events.

Dialing in closer to the hourly time-frame we can a bullish channel (possible ‘bear-flag’) developing. Even if the FTSE were to continue higher, poking its head above resistance, a break of the lower parallel of a matured ‘bear-flag’ would be our cue to look for a continuation lower. Whether we see a mature pattern develop or not, a break below 7242 would constitute a short-term lower-low and bring the daily swing-low at 7196 into play. From there, trade below that support level would likely bring into play the key long-term level at 7100. The double-top projected target lies lower near 7050, but our respect would be paid to actual price support and not a projected level.

Hourly

Bottom line: Price action has yet to show us that the market wants to turn lower, which may be an indication it will recapture the 7300-threshold, but until it does we will respect its influence as resistance. The short-term time-frame may hold the key for making tactical moves should certain developments take shape.

---Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email by signing up here.

You can follow Paul on Twitter at @PaulRobinonFX.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES