The FTSE 100 fluctuated during the course of the trading session on Tuesday, reaching down towards the 50-day EMA, which is currently sitting at the 6528 level. We have bounced from there to break above the 6600 level, showing signs of strength, so it is likely that we will continue to see a bit of a push to the upside. If we can break above the top of the candlestick for the day, then it is likely that we will go looking towards the 6750 level, which was where we had formed a shooting star from a couple of weeks ago.
The FTSE 100 continues to see a lot of noise in general, but at the end of the day it is very likely that the market is going to continue to see back-and-forth momentum that favors the upside as long as we can stay above the 200-day EMA. The 200 day EMA currently sits at the 6370 level, so as long as we can stay above there it is likely that we will jump to the upside. On the other hand, a break above the 6750 level does allow not only a continuation of the upside but a move towards the 6900 level and then eventually the 7000 level.
To the downside, if we were to break down below the 200-day EMA then the 6285 level comes into focus. That is a major support level and breaking below that would open up a move down towards the 6000 handle, perhaps even lower than that, as there is a gap near the 5900 level. With that being the case, the market is likely to continue to hear a lot of noise, but at the same time it is likely that we will pay close attention to the inoculation numbers in the United Kingdom and all of the opening headlines when it comes to the British economy. After all, the British economy had been locked down completely, so I think a lot of people are trying to price in the idea of reopening and the huge push that we will almost certainly see in the short term. The real question is whether or not the longer-term economy can continue to strengthen going forward, which is a completely different scenario. In the short term, I think that pullbacks will continue to be bought.
