Decoding FTSE 100: Key Levels Revealed
FTSE 100 Technical Outlook
This week's FTSE price action illustrates traders' sensitivity to interest rate expectations on both sides of the Atlantic.
On Tuesday, the FTSE experienced a post-bank holiday rebound, driven by weaker U.S. job numbers that were perceived to alleviate pressure on the Fed to raise interest rates further. Notably, Tuesday's rally resulted in the FTSE breaking and closing above the descending trendline formed by the lower swing highs from earlier this month.
However, the rally lost momentum when it encountered a short-term resistance zone around 7,500, mainly due to stronger-than-expected European inflation data that raised the likelihood of the ECB maintaining higher interest rates for a longer period.
Wednesday's reversal now presents a short-term resistance area that traders can monitor as we approach this afternoon's U.S. non-farm payrolls data.
A second failure at Wednesday's high would be bearish, potentially setting the stage for a decline toward the 7,200 support level (see chart below). Conversely, a decisive breakthrough above Wednesday's high might pave the way for an extended rally towards 7,625.
FTSE 100 Daily Candle Chart:
Support
Resistance
Risk management:
US non-farm payrolls is an event which has the potential to cause outsized market volatility.
Support and resistance levels should be used as a guide and are not guaranteed to hold.
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.
This week's FTSE price action illustrates traders' sensitivity to interest rate expectations on both sides of the Atlantic.
On Tuesday, the FTSE experienced a post-bank holiday rebound, driven by weaker U.S. job numbers that were perceived to alleviate pressure on the Fed to raise interest rates further. Notably, Tuesday's rally resulted in the FTSE breaking and closing above the descending trendline formed by the lower swing highs from earlier this month.
However, the rally lost momentum when it encountered a short-term resistance zone around 7,500, mainly due to stronger-than-expected European inflation data that raised the likelihood of the ECB maintaining higher interest rates for a longer period.
Wednesday's reversal now presents a short-term resistance area that traders can monitor as we approach this afternoon's U.S. non-farm payrolls data.
A second failure at Wednesday's high would be bearish, potentially setting the stage for a decline toward the 7,200 support level (see chart below). Conversely, a decisive breakthrough above Wednesday's high might pave the way for an extended rally towards 7,625.
FTSE 100 Daily Candle Chart:
Support
- S1 = 7,227
- S2 = 7,204
- S3 = 6,825
Resistance
- R1 = 7,509
- R2 = 7,625
- R3 = 7,724
Risk management:
US non-farm payrolls is an event which has the potential to cause outsized market volatility.
Support and resistance levels should be used as a guide and are not guaranteed to hold.
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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