FTSE 100 Tests Upper End of Recent Trading Range

DailyFX.com –

Talking Points

The FTSE 100 is testing the upper end of the 6054-6195
range. The bias will remain neutral as long as the 6054 to 6195
range caps price.

Resistance levels above 6195 are the May 3 high of 6283,
followed by the April 27 high of 6341. The only strong support
level at the time of writing was the May 6 low of 6053.

U.K. CPI is on deck this afternoon.

The FTSE 100 (CFD: UK100) was trading near the upper end of
the 6054 to 6195 range as trading resumed on Tuesday and at the
time of writing.

Gains in the Basic Materials Sector (+1.66%) and Technology
Sector (+1.02%) helped to lift the index over the last 24 hours
to the upper end of the above-mentioned range, while the
Utilities Sector underperformed and traded lower by -0.84%. The
upper end of the above mentioned range is the May 12 high, while
the lower end is the May 6 low.

We note that this is the same way that price tested the lower
end of the 6054-6195 range on Friday of last week; price is now
testing the upper end of the range. On price being able to
establish itself above the 6195 high the FTSE 100 would no longer
be trading sideways, and instead a bullish bias may be taking
over, as price would be creating a higher high above 6195.
Nevertheless, as long as the May 12 high of 6195 is capping
price, then the FTSE 100 will remain trading sideways.

Resistance levels above the May 12 high are the May 3 high of
6283, followed by the April 27 high of 6341. The only strong
support level at the time of writing was the May 6 low of 6053
and below it the March 10 low of 6006.

Our Stock Market forecasts for Q2 2016 are now
live on the site. Download them for free.

FTSE 100 | CFD: UK100

Created with
Marketscope/Trading Station II

; prepared by Alejandro Zambrano

A rise of 0.5% YoY in April, unchanged from 0.5% in March is
projected for U.K. CPI as per a Bloomberg News Survey. This
stands in stark contrast to the deflationary situation in October
and November of last year when annual inflation growth was
negative. The recent rise in inflation moves it closer to the
Bank of England’s target of 2% but is still far away from
triggering any action by the bank. FTSE 100 traders may therefore
not pay too much attention to today’s reading.

— Written by Alejandro Zambrano, Market Analyst for
DailyFX.com

Contact and follow Alejandro on Twitter:

@AlexFX00

original source

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