FTSE 100 Technical Highlights:
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 lagging behind other major markets
Last week, when I last looked at the FTSE here it was noted that further weakness could see the market trade down to ‘the’ bull market trend-line starting off the 2009 low. It’s not that far from here and wouldn’t require much of a shove to get to that point.
Near-term there are a couple of things worth noting. The FTSE when compared to other major markets is relatively weak, having only bounced a very modest amount. While other major indices (S&P 500, DAX, Nikkei) haven’t had rip-roaring rallies, there is nevertheless a noticeable lag, and suggests the UK index could sell off more quickly.
Adding to the bearish case is the price sequence of late working on lower lows and lower highs, with the most recent lower high potentially arriving at the 200-day MA. A drop below 7122, yesterday’s low, is seen as confirming a swing-high at the 200 and getting the FTSE rolling back downhill.
In the event the index holds up from here, to turn it bullish will require some work given the poor technical posturing. A rally beyond 7305 will be needed for starters, followed by an ability to hold a rally. This will take some time to demonstrate, so for now as long as the 200-day or 7305 at the highest hold as resistance the FTSE is set up for more selling soon.
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FTSE Daily Chart (bearish price sequence)
FTSE Weekly Chart (2009-present trend-line)
UK 100 Index Charts by Tradingview
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
