FTSE Technical Outlook – Resistance Keeps Focus Lower
- FTSE bounce takes it back to bottom of wedge, 7100
- Reversal off of resistance keeps outlook negative
- Looking for an eventual move to sub-6700
Reversal off of resistance keeps outlook negative
The FTSE underwent a surprisingly strong bounce last week after breaking down from the descending wedge we previously had in focus. The sharp rally brought not only the bottom of the wedge back into play, but 7100 as well.
As long as the footsie stays below 7100, a level extending back as far as October 2016, then the outlook will remain neutral at best in the short-term and still broadly negative looking out a little further. A breakout above Friday’s reversal bar high and close above 7100 won’t turn the picture positive, but will dampen the path of least resistance for shorts.
Looking lower, the first obvious level of support arrives at last week’s low of 6867. On a breakdown, the zone below 6700 will come into focus, an area pegged as the next likely objective in the ongoing bearish sequence of lower-lows and lower-highs.
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FTSE Daily Chart
We've been discussing this a lot lately, whether in commentary relating to global indices or in the weekly equity indices/commodities webinar, continue pay close attention to U.S. markets as risk-off there is becoming a pervasive theme. Aggressive selling in the world’s largest stock market won’t bode well for other major global markets.
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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.