FTSE 100 Outlook – Constructive Price Behavior Suggests Higher Prices
FTSE 100 Technical Highlights:
- FTSE 100 building a bull-flag pattern
- Next levels to watch arrive until upper 7700s
For our analysts intermediate-term fundamental and technical view on the FTSE and other major indices, check out the Q3 Global Equity Markets forecast.
FTSE 100 building a bull-flag pattern
The FTSE 100 has been backing-and-filling since topping out early this month; the price action is overall bullish in the absence of strong selling. A maturing bull-flag is the result of the gradual decline, which means here shortly if the FTSE is to make good on the pattern it should start to trade higher again in-line with the trend off the June low.
A move above the top-side trend-line of the pattern and 7590 swing-high from last week should be enough to get things rolling higher beyond the 7621 level from July 3. Looking to the left, outside of the small swing-high from August that recently helped put a lid on prices, there isn’t any significant price resistance until the congestion from the middle of last year in the vicinity of 7765/90.
The FTSE could still turn down from current levels and trade lower without breaking the sequence of the bull-flag, but it will need to do-so without strong momentum and maintain the parallels in place that make up the pattern. Should selling turns aggressive, then we will need to reconsider the index’s positioning.
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FTSE Daily Chart (building a bull-flag)
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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.