FTSE 100 Technical Highlights:
- FTSE chopping its way towards 2021 highs
- May pick up some momentum here soon
- Resistance in the 7000/7150 vicinity targeted
The FTSE 100 has been a chop-fest, as price action hems and haws its way higher. The general grind has left the index difficult to get a good handle on, but it may soon gain more momentum as general risk appetite for stocks, globally, remains strong.
Why other than strong risk appetite might the FTSE garner more steady buying pressure? From a catalyst standpoint that is unclear, but from a price action standpoint often times gradual rises give-way to a surge in the absence of a negative event. In recent weeks, the DAX is an example of how a steady grind/base can lead to a shot higher.
The FTSE’s first objective is the yearly high at 6903, and from there an even larger test of a series of lows created during 2019 and 2020. There are numerous inflection points from just over 7k up to around 7150 that would likely prove to be a pivotal test.
From a tactical standpoint, the trading bias is to the upside. Potential for a rally with better continuity appears to be quickly rising. The chop may continue a little while longer before this happens, but as long as the series of higher lows dating to December can continue, then the outlook will remain positive.
It would take a clipping of the most recent swing-low at 6618 to cast a shadow over the upside. Even then, there is a steady trend-line connecting most of the lows just mentioned. A breaking of that line is needed to ultimately turn the outlook favorable for shorts.
FTSE Daily Chart (grinding towards a potential spike higher)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
