FTSE 100 Technical Analysis: Caught Between Support & Resistance
FTSE 100 Technical Highlights:
- The FTSE is turning lower from big spot of resistance
- Testing channel structure off the February low
- Interesting spot to watch price action for directional cues
The FTSE 100 reached just a shade above a substantial zone of resistance from roughly 7000 up to around 7150, but not by enough or in a convincingly enough manner to qualify as a confirmed breakout. The recently tepid rise also met a slope running over from June of last year.
Resistance is helping usher the FTSE lower at the moment, which is putting the channel floor from February to the test. It’s an interesting spot for the index to be in, indeed, as a battle between support and resistance looks to bring some sort of tradable resolution.
For now, while the index is off by just over 1% for the session (at the time of this writing), and looking like it could break channel support, it should be respected until in fact it is broken. If we see a bit further of an erosion that allows for some separation from the channel, then a bearish bias will grow in strength.
On the flip-side, if support can hold, it doesn’t necessarily mean it will be a clean run back to the top-side, but does keep longs in the game. As long as the channel structure stays intact, then despite resistance the outlook is at worst neutral.
Tactically, this makes the current landscape a difficult one to navigate with conviction. But with some time we may have a resolution that leads to a move. The risk does appear skewed towards seeing a breakdown with recent momentum tepid around a big resistance zone, but again, we will need to wait for just a little more confirmation.
FTSE Daily Chart
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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.