FTSE Technical Analysis – Rolling Over Towards Confluent Support
FTSE Technical Highlights:
- FTSE rolling over from resistance to confluent lines of support
- ‘Brexit’ headlines remain a continued threat
FTSE rolling over from resistance to confluent lines of support
‘Brexit’ remains a primary focus in all-things U.K. related, and with GBP rallying strongly the past few days we are seeing some pressure on the currency-impacted FTSE 100. The current 10-day correlation between GBP and the 100 stands at -88%, a strong reading indeed.
Solely on its own technical merits, despite ‘Brexit’ and all, the FTSE has traded well. It’s pulling off an area of resistance we noted not long ago, and now as it breaks the Feb 19 low it is heading towards a significant spot of support.
Rising up off the December low is a trend-line in confluence with a pair of peaks created last month. This makes the area around the 7k-mark an important one if the higher-high/higher-low structure is to remain off the December low.
A hold of support will keep the upward trend off the low intact for now, but a break could see the market back down towards the 2018 low. Overall, the big-picture outlook is for a much larger decline to develop this year, with the 5800/600-area as a potential target. The longer-term prospects of much lower prices will be discussed in future articles, so stay tuned…
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FTSE Daily Chart (Declining towards confluent support)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.