FTSE Technical Outlook – Rally Continues, but Caution Warranted

What’s inside:

  • FTSE continues to extend rally following breakout of H2 2017 range
  • Projected target zone of 7850-7900 nearing, but…
  • Fresh longs cautioned as retracement risk heightens on short-term pattern development

See what’s expected to drive the FTSE and GBP this quarter in the Q1 Trading Forecasts.

Last week, when we discussed the FTSE we noted it as likely to continue trading higher as long as it didn’t fall back inside the range which developed during the second-half of last year. The target based on the height of the range (~300 points) pointed to an objective of 7850/900. We’re getting close.

Caution on new longs is warranted at this juncture, though, as retracement-risk is beginning to increase with each new push higher. On the hourly time-frame, a rising wedge is developing which may usher in a pullback. If the lower trend-line extending higher from 12/15 is broken, it could lead to the first real test of longs’ resolve in over a month. Rising wedge formations can lead to swift moves once triggered (if triggered).

In the event of a breakdown out of the pattern and 12/15 trend-line, support levels begin

Article source: https://www.dailyfx.com/forex/technical/home/analysis/uk100/2018/01/11/FTSE-Technical-Outlook-Rally-Continues-but-Caution-Warranted-PRtech.html?DFXfeeds=forex:technical:home:analysis:uk100