FTSE 100 Technical Outlook
FTSE 100 Technical Outlook
In prior technical outlooks, we highlighted the importance of staying alert in sleepy markets, and last Thursday’s developments on the FTSE 100 serve as a prime illustration of this principle.
Having spent the first half of the week coiled and consolidating, the FTSE burst into life on Thursday – breaking and closing above multiple levels of resistance and posting its biggest day of gains since March.
Thursday’s rally was fuelled by the European Central Bank (ECB) confirming the end of its rate hike cycle. This fed into a surge in commodity prices which propelled the FTSE 100 higher as the index is heavily weighted towards energy and mining stocks.
The rally brought the FTSE back to the levels it had reached during the summer swing highs—an area we had previously pointed out as a zone of resistance (refer to the chart below). On Friday, market participants reacted to this resistance by closing out positions in anticipation of the weekend.
It's important to highlight that even though the FTSE has started the new week with a somewhat subdued performance, the prevailing short-term momentum remains bullish, thanks to the gains seen on Thursday.
FTSE 100 Daily Candle Chart:
Support
Resistance
UK Sector Snapshot
Risk management:
Support and resistance levels should be used as a guide and are not guaranteed to hold.
We have a busy week ahead on the economic calendar, key events include; Eurozone inflation data on Tuesday morning, UK inflation on Wednesday morning, the Federal Open Market Committee interest rate announcement on Wednesday, and the Bank of England rate decision on Thursday.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
In prior technical outlooks, we highlighted the importance of staying alert in sleepy markets, and last Thursday’s developments on the FTSE 100 serve as a prime illustration of this principle.
Having spent the first half of the week coiled and consolidating, the FTSE burst into life on Thursday – breaking and closing above multiple levels of resistance and posting its biggest day of gains since March.
Thursday’s rally was fuelled by the European Central Bank (ECB) confirming the end of its rate hike cycle. This fed into a surge in commodity prices which propelled the FTSE 100 higher as the index is heavily weighted towards energy and mining stocks.
The rally brought the FTSE back to the levels it had reached during the summer swing highs—an area we had previously pointed out as a zone of resistance (refer to the chart below). On Friday, market participants reacted to this resistance by closing out positions in anticipation of the weekend.
It's important to highlight that even though the FTSE has started the new week with a somewhat subdued performance, the prevailing short-term momentum remains bullish, thanks to the gains seen on Thursday.
FTSE 100 Daily Candle Chart:
Support
- S1 = 7,500
- S2 = 7,370
- S3 = 7,227
Resistance
- R1 = 7,724
- R2 = 7,941
- R3 = 8,045
UK Sector Snapshot
Risk management:
Support and resistance levels should be used as a guide and are not guaranteed to hold.
We have a busy week ahead on the economic calendar, key events include; Eurozone inflation data on Tuesday morning, UK inflation on Wednesday morning, the Federal Open Market Committee interest rate announcement on Wednesday, and the Bank of England rate decision on Thursday.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
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