The FTSE 100 fell a bit during the trading session on Tuesday to reach down towards the 50-day EMA. At this point in time, the market is likely to see buyers underneath, not only due to that 50-day EMA, but also the uptrend line that makes up the bottom of the ascending channel. Furthermore, the 7000 level is sitting just underneath as well, and it would make sense that certain traders would be paying close attention to that area.
If we were to break down below the uptrend line, then the market is likely to go looking towards the 6800 level, not only due to the fact that it is a large, round, psychologically significant figure, but it is also where the 200-day EMA seems to be heading towards. In other words, the 200-day EMA is something that I think would act as a bit of an anchor for price, and I think a lot of people would be looking at it as a potential buying opportunity. In the meantime, when you look at current price action, you can almost make an argument for an ascending triangle.
If we were to break above the highs of the session on Tuesday, then that triangle would be broken to the upside, allowing the market to clear the 7100 level, and go looking towards 7250 which would be the “measured move” of that triangle and go looking towards the recent highs. That would keep the market well within the ascending channel, so I think it would be “business as usual.”
There is a lot of back and forth about the United Kingdom reopening, and I think that is part of what you are seeing in the FTSE 100, but there are also concerns around the world when it comes to risk appetite, so that may show up here as a bit of “knock on negativity” from other assets and parts of the world. Either way, we are in an uptrend, and I do believe that given enough time we will probably continue to follow that overall attitude, so I am looking for buying opportunities at this point and not really too worried about trying to sell it, as the FTSE 100 has been such a strong performer.
