FTSE 100 index retreats from 4-month high; bullish in the near term.

FTSE 100 stock index (UK 100) has declined considerably after touching the four-month high of 7265 on February 15. During Thursday’s trading, the price has gained some ground, while it is currently not far below the 50.0% Fibonacci retracement level of the down leg from 7900 to 6533, near 7220.

The flatly aligned Tenkan- and Kijun-Sen lines are indicative of a possible bearish correction, signaling a potentially oversold market. The MACD and the stochastic oscillators are heading south as well.

Should bearish dynamics dominate, the market might revisit the 7060 support, which coincides with the 38.2% Fibonacci, before falling towards the 7000 strong psychological level, taken from the inside swing top on January 21.

If the price manages from more bullish actions and surpasses the four-month high, immediate resistance would come from the 200-day simple moving average (SMA) currently at 7297. Further up, the index could rest around the 61.8% Fibonacci level, around 7380, while a violation of that point may shift the attention to a bullish outlook with the next target being 7560.

Overall, the downfall from 7900 is still active and hence the outlook remains negative despite the short-term upward rally.


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This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Source: XM

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