FTSE 100 Price Rolling Over, Chart Patterns in Focus
FTSE 100 Technical Highlights:
- FTSE rising wedge is snapping, lower levels look to be ahead
- Head-and-shoulders top could quickly come into view on weakness
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 rising wedge is snapping, lower levels look to be ahead
The grind higher in the FTSE off the August low may finally be drawing to a conclusion as the ascending wedge the choppy price action has take the shape of is in the process of being triggered. It has broken when looking at the hourly time-frame, further confirmation will come today if the day can close on the weak side of the ledger.
Further selling with have a solid area of short-term support in focus around the 200-day and where the FTSE last bounced from it, in the 7218/7199-area. There have been a few occasions where price has held or folded around the 200, making it a short-term spot of interest.
Beneath 7199 there isn’t any price support to speak of until a pair of lows from August until you get down to 7045/20. This is also a very important area due to the developing topping pattern under construction since April.
The potential head-and-shoulders pattern could mean a much larger decline is set to soon get underway. But before we can think too much about that, the ascending wedge and near-term support are the primary focus. A sustained break above 7380 will undercut the current near-term bearish bias.
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FTSE Daily Chart (wedge, H&S)
FTSE Hourly Chart (wedge broken)
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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.