The FTSE 100 has gone back and forth during the trading session on Tuesday as we continue to hover just below the all-time highs. The 7100 level seems to be offering a bit of support, as it was not only previous resistance, but we also coincide quite nicely with the previous uptrend line that I have drawn on the chart from the ascending channel. I do not necessarily put a lot of faith in that channel, but it is something to add to a list of reasons why we may be going higher. Furthermore, we have the 50 day EMA turning upward near the 7022 handle, so I think it is only a matter of time before we go higher.
The British pound fell rather hard during the course of the session on Tuesday, which does lend credence to the idea of the exports coming out of the UK as being cheaper, so that might help the idea of the market going higher as well. Nonetheless, up is up, and at the end of the day the momentum of the market is the only thing that matters. The technical analysis certainly suggests that we do have further to go, mainly due to the fact that the trend has been bullish and now that a break above the 7190 level allows for a bigger move, then we will probably go looking towards the 7250 handle, possibly even the 7400 level.
To the downside, the 50 day EMA is of course going to offer certain amount of support, especially as the 7000 level is sitting just below it. Breaking down below that level then opens up the possibility of a move down towards the 200 day EMA which is currently at the 6785 handle. If we were to break down below there, then the market is likely to continue to fall rather significantly. The market breaking down below there would probably be a major negative event, allowing the bearish pressure to completely overwhelm. After all, the market is very sensitive to risk appetite right now, as we have seen in multiple currency pairs. At this point, if we see the FTSE 100 break down then it is probably going to be seen elsewhere. The major stock indices around the world tend to move in the same general direction so pay attention to Asia and North America.
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