FTSE 100 Price Outlook: Strong Rejection at 200-day Keeps it Rising
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.
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FTSE Daily Chart (200-day keeps floor in, H&S still has potential)
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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.