FTSE 100 Technical Highlights:
- FTSE narrowing range leading to a triangle pattern
- Price action suggests that a breakout is nearing
- Upside favored at the moment, but could take time for confirmation
The FTSE 100 continues to find itself in a directionless state, oscillating back and for since the beginning of the year. The range, however, is narrowing and this could bode well for a trading opportunity soon. With a little more time the triangle could offer a pent up situation that leads to a strong move.
It would be ideal for the pattern to tighten a bit more before confirming, but it has developed enough to qualify as a valid pattern. Given the direction of the trend prior to its development and generally firm appetite for risk, a top-side breakout appears most likely at this time.
But at the moment risk/reward isn’t appealing with price pressed up against the top-side trend-line of the pattern. A dip back towards a would-be apex, or worse the lower trend-line, could unfold first.
Looking to some actual levels, on the top-side a daily close above 6799 will have a break towards the top of the triangle at 6903 in play, with some very important levels from 2019 to consider afterward. There are numerous lows in the same vicinity from a year-long range to watch from 7025 up to around 7150.
If the FTSE fails and breaks the lower trend-line of the triangle support levels clock in at 6465, then 6397 down to 6262 where the 200-day MA lies along with a low from November.
For now, the bias is neutral but with a little more time we could have some identifiable cues to work with.
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FTSE Daily Chart (triangle forming)
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—Written by Paul Robinson, Market Analyst
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Originally Posted on: https://www.dailyfx.com/forex/technical/home/analysis/uk100/2021/03/10/FTSE-100-Technical-Analysis-Narrowing-Range-Setting-the-Table-PRtech.html
By: Paul Robinson