FTSE Chart Analysis – Ricocheting Off Resistance

33

FTSE Technical Highlights:

  • FTSE technical picture is relatively clean for the moment
  • Turning lower off resistance back towards recent support
  • Pressure is on the market, but may not see extensive follow-through until January

Looking for forecasts, long-term trade ideas, and educational content? We got you covered. Check out the DailyFX Trading Guides page for details.

FTSE technical picture is relatively clean for the moment

The technical picture in the FTSE is relatively clean at the moment despite all the uncertainty surrounding ‘Brexit’ and the Pound. Even excluding the noise the FTSE has a clean technical backdrop for an index which often is lacking one.

The recent bounce is coming from a series of swing lows created between September and December of 2016, however; the bounce found a ceiling yesterday at former support turned resistance (Mar/Oct lows). So far recent events are playing out in a textbook manner.

Big-picture forces are highly unfavorable for the FTSE, ‘Brexit’ aside. The 100 is a multi-national index and with global stock markets sagging and looking likely to get worse, currency impact is taking a backseat and likely to continue to do so. The three-month correlation between the FTSE and GBP is a strongly positive 63%, derailing from its usual negative relationship since the ‘Brexit’ vote.

Getting back to the near-term outlook, the turn down from resistance could soon have support back in focus, and while there is pressure on the market, broadly speaking, we may see a bit of choppiness between levels as the year quickly comes to an end. Tactically speaking, the best approach may be to trade off levels as long as they hold on a daily closing basis (Support: 6673, Resistance: 6908).

Check out this guide for 4 ideas on how to Build Confidence in Trading.

FTSE Daily Chart (Trading between support and resistance)

FTSE Chart Analysis – Ricocheting Off Resistance

You can join me every Tuesday at 9 GMT for live analysis on equity indices and commodities, and for the remaining roster of live events, check out the webinar calendar.

Tools for Forex & CFD Traders

Whether you are a beginning or experienced trader, DailyFX has several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

LEAVE A REPLY

Please enter your comment!
Please enter your name here