FTSE 100 Technical Outlook – Bullish Break Has Resistance to Overcome
FTSE 100 Technical Highlights
- FTSE loose bull-flag broke yesterday
- Resistance needs to be crossed around 6325
- Run to 200-day still in the works
FTSE loose bull-flag broke yesterday
Last week, we discussed the possibility that the downward sloping chop since early June could morph into a bull-flag pattern that would send it higher. The pattern formed, but was a little on the loose side given its lack of multiple touchpoints, but nevertheless a valid pattern.
Yesterday’s breakout above the top-side line postures the FTSE for higher prices, but there is one more hurdle to cross before seeing confirmation. There are a couple of minor swing highs from June/July around 6325/45 that need to be crossed before momentum can pick up.
A break above resistance should clear a path towards the June high at 6511 and the 200-day MA at 6588 (& declining). This area also consists of the December 2018 low, making the 6500s a big, big spot to watch should the FTSE be so inclined to rise to that point.
If, however, we don’t even see price hurdle the mid-6300s that it is stuck at now, then more rangebound price action could be in store as the bull-flag break turns into another round of choppy price action. It wouldn’t necessarily be a bearish event, but one that would make the index once again avoidable until a cleaner set-up develops.
FTSE Daily Chart (need to hurdle 6345)
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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.