FTSE Technical Outlook – 7300 Taken Out, Now What?

FTSE Technical Highlights:

• FTSE cleared big hurdle around 7300
• The 200-day MA lies just ahead under 7400
• Risk/reward for both sides not favorable at the moment

Check out the newly released DailyFX Quarterly Forecasts to find out what are likely drivers in the weeks ahead for the FTSE and GBP.

FTSE cleared big hurdle around 7300

The FTSE continues to be a surprise to the upside, and despite having had major resistance around 7300 to contend with and having rallied a good distance off the lows to get to that area (overbought), it still managed to blow right through it on Wednesday.

Just ahead lies the 200-day MA, which may or may not be a problem, but at this juncture given how far the index has come the thinking is it might be. However, it’s not the most influential of moving averages on its own, at least not in recent history, and with it lacking price levels in confluence it isn’t viewed as the most steadfast line of resistance.

This is where trading the footsie is getting tricky, and at the moment risk/reward on either side is lacking, especially for fresh longs. Seeing how the market reacts to former resistance around 7300, now support, may be a prudent approach – ‘wait-and-see’.

The ‘wait-and-see’ is whether it can hold it now that it has been reclaimed, or whether the footsie wants to drop back below it. The market could become choppy around 7300, as well, with no real adherence to it. Generally speaking, feeling the risk, but not the reward in being too involved at the moment. That’ll change, but patience, as is the case with a few other markets right now, may be a virtue worth exercising in the meantime.

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FTSE Daily Chart

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—Written by Paul Robinson, Market Analyst

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