FTSE 100 Technical Highlights:
- FTSE 100 trading around the 200-day MA
- Long-term moving average may have limited impact
- Levels to keep an eye on in the coming sessions
FTSE 100 trading around the 200-day MA
In the last FTSE 100 outlook, the focus was on confluent support via the trend-line from December and March high; a threshold which was easily undercut. This shifted attention towards the 200-day MA, which is now under siege with further escalation in the U.S./China trade war keeping global markets on their heels.
The 200-day MA may not turn out to be a big point of support, but with a swing-low from late-March at 7146 not far below we may see some type of near-term buying activity keep the index afloat. Below the late-March low next up is the 7078/41-area, followed by 7000/6968.
Keep an eye on how other global markets are playing out with the trade war as the dominating theme. The DAX is working towards support around 11800, while the S&P 500 is vulnerable as the rising wedge it recently broke down from projects lower levels ahead.
From a tactical standpoint, very short-term minded traders (intra-day) may want to continue to focus on the short-side with in mind the notion that a bounce could develop at any time. It looks a little late in this particular move to put on a good risk/reward swing-short, but at the same time longs don’t hold any appeal without proper price action yet suggesting the decline could be drawing towards an end.
Should we see a bounce soon, given the sharp break in recent sessions, how it unfolds will be of great interest to watch as a continuation pattern of substance could form and give a good look for new short positions.
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FTSE 100 Daily Chart (trading around 200-day MA)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX