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FTSE 100 Technical Analysis: Can it Punch Through its Ceiling?


MongiIG

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FTSE 100 TECHNICAL HIGHLIGHTS:

  • The FTSE is coming off strong support, but…
  • Has a fairly strong ceiling to punch through.

FTSE 100 on track for two-year record streak as investors await critical  Brexit vote today | UK | News | Express.co.uk

 

The FTSE 100 is making a strong comeback these days after hitting the bottom of a multi-month range and the 200-day moving average. The spring back has in focus a trend-line running lower from the January 2020 high created just before the pandemic roiled markets.

In confluence with this trend-line, and perhaps more importantly, is the top-end of the range that has been developing since June. The two combined could create a ceiling that proves too difficult to climb through, at least on an initial attempt.

A turnabout in momentum after thoroughly testing resistance from around 7172 up to 7225 could provide a decent risk/reward opportunity for those looking to play for a continuation of range conditions. A quick turn lower looks likely, at the least.

If we see momentum pick up as resistance comes into play, then perhaps we will see a breakout scenario unfold. It would take a daily and maybe even a weekly close outside the range to garner further interest from the long-side of the tape.

For now, risk/reward from either side of the tape doesn’t appear favorable until we see how resistance is handled.

 

FTSE DAILY CHART

FTSE daily chart

FTSE Chart by TradingView

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Written by Paul Robinson, Market Analyst, 30 September 2021. DailyFX

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