Can the Bullish Break Out Proceed Publish-Brexit?

FTSE 100 Value Outlook:

• The FTSE 100 surged to check resistance across the 6,860 degree
• Subsequent resistance could reside on the 7,000 mark
• That stated, the FTSE 100 might fall prey to a case of the “purchase the rumor, promote the information” impact

FTSE 100 Forecast: Can the Bullish Break Out Proceed Publish-Brexit?

The FTSE 100 suffered resulting from Brexit uncertainty for months, however a latest deal could have opened the door to a longer-term restoration. The index has surged practically 400 factors (+5.4%) this week alone, suggesting there’s nonetheless important demand for the index even after the settlement was struck in late December. Can the FTSE 100 push greater nonetheless or will bullish sentiment recede?

FTSE 100 Value Chart: Each day Time Body (August 2019 – January 2021)

The way to Commerce FTSE 100

Earlier than contemplating sentiment, you will need to observe the technical panorama. The FTSE 100 is presently bolstered by close by help and a latest golden cross formation, which usually indicators a interval of rising costs. Other than the golden cross, the 200-day shifting common and the 50DMA themselves could present constant help within the days forward and it might assist carry the FTSE 100 greater.

FTSE 100 Value Chart: 4 – Hour Time Body (June 2020 – January 2021)

What’s FTSE 100? Historical past, Corporations & Value Actions

However, resistance is reasonably sparse. Latest worth motion reveals the Fibonacci degree close to 6,860 possesses some affect however proximity to cost could go away it weak. Secondary and tertiary resistance could reside on the 7,000 and seven,200 ranges respectively. Evidently, the trail of least resistance appears greater at this stage and sentiment stays optimistic.

That stated, market sentiment is a fickle factor so bearish reversals stay a risk and consolidation might show wholesome for a longer-term continuation greater. Within the meantime, nevertheless, IG shopper sentiment information reveals retail merchants suspect the rally has reached its finish as a majority are net-short. Since we sometimes take a contrarian view to crowd sentiment, this may occasionally recommend the FTSE 100 will proceed greater within the weeks forward. Comply with @PeterHanksFX on Twitter for updates and evaluation.

–Written by Peter Hanks, Strategist for DailyFX.com

Contact and observe Peter on Twitter @PeterHanksFX