FTSE 100 Outlook – Rally Has Price Extending into Resistance Levels
FTSE 100 Technical Highlights:
- FTSE 100 trading into trend-line, price levels ahead
- May pause here but overall tone still firm
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FTSE 100 trading into trend-line, price levels ahead
The FTSE 100 popped yesterday as global stocks as a whole were quite strong. The rally brought into play the trend-line running down off the May 2018 record high. Careful attention will be paid to how it handles the trend-line; hold firm or find eager sellers?
A rally on through trend resistance will have focus on resistance in the vicinity of 7523/52, the April high/September 2018 peak, respectively. Either the trend-line now or price resistance ahead are enough to prove problematic.
Overall, though, the global risk-trade in general remains positive and may be enough to continue helping along the FTSE. With U.S. stocks nearing record highs again and Europe looking to trade to fresh yearly highs, the FTSE may be ready to soon surpass the April high.
On the downside a minor trend-line from earlier this month will quickly come into play on weakness. A drop through the recent swing-low at 7316 would be concerning and a reason to start gearing up for a move towards the trend-line off the December low.
For now, risk/reward on fresh longs doesn’t hold much appeal with resistance at hand, but without a break in upward momentum shorts aren’t very appealing either. Trade set-ups at the moment look to be limited to intra-day scalps until we can see how things play out in the days ahead.
FTSE Daily Chart (levels, lines to watch)
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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.