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FTSE 100 Price Outlook: Strong Rejection at 200-day Keeps it Rising

FTSE 100 Price Outlook: Strong Rejection at 200-day Keeps it Rising

Paul Robinson, Strategist

FTSE 100 Technical Highlights:

  • FTSE rising wedge broke, but 200-day put in a floor
  • Big-picture H&S still a possibility, but on hold for now

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 broke, but 200-day put in a floor

On Wednesday, the FTSE was continuing its decline from a rising wedge formation we’d been focusing on in the week before, as the upward grinding price action smacked of a correction of the down-move off the July high.

But once again the 200-day came into play as a meaningful threshold to pay close attention to. It was the 6th time since May a turn of some sort has developed from the long-term moving average. Sometimes it isn’t that influential without the help of a price level, and sometimes it is, as was the case again this week.

Now that the UK index is shooting higher off support the upside must be respected again. However, there is still plenty of room for the larger topping, a head-and-shoulders formation, to come to form and post a significant threat in Q4.

For now, longs have a little more room until the July 25 low at 7462 before it may come into play as resistance. Shorts may be best-served by waiting for price action to slow down and give signs again that the FTSE wants to roll over.

Check out this guide for 4 ideas on how to Build Confidence in Trading.

FTSE Daily Chart (200-day keeps floor in, H&S still has potential)

FTSE 100 Price Outlook: Strong Rejection at 200-day Keeps it Rising

UK 100 Index Charts by Tradingview

You can join me every Wednesday at 930 GMT for live analysis on equity indices and commodities, and for the remaining roster of live events, check out the webinar calendar.

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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.

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