FTSE in a Fist Fight Around Record Highs
- FTSE closes at new record highs, but yet to break intra-day record high
- Market falling back towards big trend-line off the Feb ’16 low
- If support holds, look for the 7599 intra-day high to be challenged soon
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Last week on Thursday the FTSE followed in the footsteps of a couple of other major global equity indices (S&P 500, DAX) and closed at a new all-time high. Time to be excited, right? Despite the close in record territory there are still intra-day levels standing in the way of the index trading freely to new highs, and even then, buying into new record highs hasn’t proven to be much of a fruitful venture in the past. New highs, trade a little higher, then dip has been the pattern for quite some time.
It was only a single day on this trip into record territory before finding sellers, but the decline unfolding in slow fashion so far suggests there aren’t a great deal of sellers in the vicinity. A spot we’re watching as support is soon to arrive with a little more weakness; it comes in by way of the February 2016 trend-line which the UK index regained claim on back on the 3rd of the month. It's been an influential trend-line since the latter part of August, and why not? The two connecting points – major global equity market low in February 2016 & ‘Brexit’ low – are important ones. The trend-line held successfully in August before busting, can it provide support this time around?
If the noted trend-line can hold then look for the footsie to make an attempt on busting through the intra-day record high at 7599. If the trend-line doesn’t hold, then the first level of support arrives around 7435/60, the top of a range from August-September. Holding this after breaching the Feb ’16 trend-line would be important. For now, that isn’t under threat so we’ll keep an eye on how price reacts to the two-significant top and bottom-side thresholds in front of us.
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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.