Forex Trading

FTSE Chart Evaluation – Resistance Might Proceed to Preserve a Lid on the Market

FTSE Technical Highlights:

FTSE rally stopped in its tracks round 7200

In the present day’s rally might solely be one other take a look at earlier than decrease

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FTSE rally stopped in its tracks round 7200

The FTSE’s rally since late final month took it as much as the world surrounding 7200, a spot penciled in as doubtlessly being problematic given its significance late final yr. The flip down to finish final week was the primary signal of this truly being the case.

In the present day’s rally is bringing the FTSE close to one other take a look at of resistance, however will it break on by? Final week we noticed Euro-zone equities weaken materially, Japan is at multi-week lows with solely a few days of promoting, and the U.S. might be simply getting began on turning decrease.

With the worldwide image in thoughts, the FTSE, which was a draw back chief through the back-half of final yr, seems to have its work reduce out for it if it’s going to proceed to work its means larger. For now, I’m going to provide the good thing about the doubt to resistance (as all the time, respect till damaged).

If the FTSE is to commerce materially larger, just a little back-and-forth would do it some good to construct up some energy earlier than making one other try and rally. Assist clocks in round 7k, close to a pair of highs from final month. The zone simply above, if damaged, will rapidly carry the 200-day into play, one other sizable headwind for the index.

For now, the sensation is that the prudent strategy can be to provide the market just a little time to determine itself out earlier than working with a bias in both route. It’s round sturdy resistance (conserving longs at bay), however on the identical time the final near-term pattern construction continues to be supportive (conserving shorts at bay).

Take a look at this information for four concepts on Construct Confidence in Buying and selling.

FTSE Each day Chart (Resistance to be problematic)

FTSE daily chart, resistance to be problematic

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—Written by Paul Robinson, Market Analyst

You may comply with Paul on Twitter at @PaulRobinsonFX

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