FTSE 100 Technical Highlights:
- The FTSE rushed through but reversed to close above big support
- Major horizontal support and trend-line are in confluence
The FTSE 100 has recently fallen with a lot of momentum, but that came to a pause yesterday with a powerful reversal candle forming. The forming of the candle is one thing, but where it occurred at is another.
There is strong confluent support around 6870/6780, created by the rising trend-line off the March 2020 low and several intermediate-term turning points created since a peak created in January 2021. There were three instances of a low within a 10 handle range of one another.
These were carved out in May, July, and September last year. The multiple turning points on this horizontal line give it a lot of weight as a support level the market should respect. Couple it with a trend-line and proper price action, and you have a line-in-the-sand.
Not saying it will hold for a long time, as we have seen given the nature of this market cycle’s catalyst – a highly unpredictable situation – that exhaustion moves can become even more exhausted. But for now as long as Monday’s low at 6787 holds on a closing basis, then the outlook is neutral to bullish.
We may only see a bounce ensue before more selling occurs, hard to say at this juncture how much the market can rally. If we see a close develop below yesterday’s low, then we will need to respect the fact that a big level of support was broken and run with a bearish bias.
FTSE Daily Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
