FTSE Technical Take – Formidable 7300 Level Back in Play

FTSE Technical Take – Formidable 7300 Level Back in Play

FTSE Technical Highlights:

  • FTSE has major resistance just ahead
  • Looking for a pullback at the least on first test
  • Keep an eye on the S&P 500 around big support

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 has major resistance just ahead

It’s been a surprisingly strong bounce in the U.K., with the FTSE showing unrelenting strength since carving out a low last month. However, just ahead lies major resistance surrounding 7300. We’ll call it a zone of 7288 up to 7326 (levels are rarely precise). How the footsie reacts upon a test is of primary interest.

A rejection of some type, whether it be a key-reversal or some other bearish candlestick configuration, will be our cue that the market is going to honor resistance. The thinking on this end is that even if the FTSE is to rise to greater heights it will retrace first. The rally looks a bit overdone in the near-term and the area surrounding 7300 has been extremely important since gaining traction a year-ago.

On a decline, ~7100 will be watched closely should the market pull off that far. It’s another level of significant interest dating all the way back to October 2016.

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FTSE Daily Chart

FTSE daily price chart, big resistance just ahead

Keep an eye on the S&P 500 around big support

With the U.S. stock market as the world’s largest, it will be important to pay attention to how the S&P 500 fares given its recent volatility. So far, it has held big support around the 200-day and Feb 2016 trend-line, but should price give-way then look for another swoon in global markets and the FTSE to join in to some degree.

But for now, the S&P is holding which has given life to global markets. The volatile range over the past three weeks, as discussed in Tuesday’s webinar, is set to resolve itself soon and the direction of that resolution could hold big implications for general risk appetite.

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—Written by Paul Robinson, Market Analyst

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