FTSE 100 Technical Highlights:
- FTSE staying contained within channel
- Keeps outlook neutral to bullish
- Break of lower parallel needed to turn bearish
FTSE staying contained within channel
Last Monday, the FTSE 100 successfully held the lower parallel of an upward sloping channel, a structure that has been used as a reliable guide for formulating a general trading bias. While the angle of the channel is low and the trading has been sluggish, as long as the FTSE stays above the lower bound then the outlook is neutral to bullish.
Looking higher, a rip-roaring rally isn’t likely to develop, but there is room to trade towards the recent peak at 6511. A rise to that point would constitute a potentially critical test, as an important low created in December 2018 resides there. The high from earlier in the month came shy of the level, but close enough to constitute a test.
Another rise to that point may stall as sellers line up again, or even line up before reaching the monthly high. If the latter holds true this could usher in a potentially bearish outcome as a lower-high from the June 9 swing-high may mark the beginning of a downtrend.
However, for that to be the case we would need to see the lower parallel snapped and a lower-low develop below 5952, the most recent low on the bottom of the channel. Should this happen we would most likely need to adjust our trading bias towards shorts and revive the possibility that we see a retest of the March lows.
For now, the FTSE sits between the upper and lower parallel, making for a somewhat tricky spot from a swing-trade perspective when looking at risk/reward for new entries. For nimble short-term traders (i.e. day-traders) the general trading bias appears more favorable at the moment for bullish bets.
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FTSE Daily Chart (channel keeps price pointed higher)
![FTSE daily chart](https://a.c-dn.net/b/3qUPaA/FTSE-100-Technical-Outlook-Channel-Remains-an-Important-Guide-PRtech_body_ftse100dailychart.png)
UK 100 Index Charts by Tradingview
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX