FTSE Technical Highlights:
- FTSE decline ensues from top of channel
- Trend in the near-term remains lower
- Watch the hourly chart for short-term cues
Yesterday, the FTSE took it on the chin to the tune of 1.3% in-line with a broad global equity market sell-off on restoked fears of a trade war. The decline came following a failure on Tuesday to break above the upper parallel of the channel running lower off the record high.
The sequence of lower highs and lower lows remains intact, and while some might view the current configuration as having a bull-flag look to it (and be correct), as long as the footsie remains contained within the confines of the downward channel the outlook in the near-term remains bearish.
The next clear level of support arrives at 7508, then beyond there lies the 200-day MA at 7463, and with aggressive selling the lower parallel closer to 7400. To turn the picture bullish from here and trip the wire on what could be a bull-flag, a move above the upper parallel will be needed along with a breakout above the recent swing-high at 7715.
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FTSE Daily Chart (Sequence still favors lower prices)
Looking at an hourly chart of the cash session (main hours of operation, 700-1530 GMT) for short-term guidance, there is a trend-line running up from the 6/25 low keeping a bid in the market for now. A break below should have yesterday’s sell-off resuming downward momentum.
FTSE Hourly Chart (Watch trend-line)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX