London FTSE 100

FTSE 100 Index Recovers Key Levels. 2021 High Back In Range

The U.K’s FTSE 100 index broke down through key technical levels last week only to recover them as the Fed poured cold water on rate rise fears.

Despite the U.K reporting better-than-expected GDP figures for the first quarter, traders were focused more on what was going on across the pond.

The huge rise in the United States Consumer price index led to large gains in the three largest US stock Indices. The headline data showed that the price of consumer goods had risen at the fastest annual rate since 2008.

Even more alarming was the rise in core inflation. The monthly increase was the largest since 1981.

This of course sent US stock markets sharply lower, taking the FTSE 100 along for the ride.

The sharp rise in inflation stoked fears that the Federal reserve may bring forward the timeline for raising interest rates. Fed officials quickly dispelled this, resulting in stock markets reversing higher, and again, taking the FTSE 100 along for the ride.

FTSE 100 Technical Outlook

The Daily chart shows us the damage the FTSE 100 took in the middle of last week. The Index had started in fine form and set a 12-month high of 7,166 on Monday.

Tuesday was a different story altogether and the FTSE lost -1.6% and finished the day below an important trend line.

As the FTSE 100 slid through 6,985, it broke a trend from the November 2020 lows.

The 50-Day Moving Average was next in the bear’s sights. The 2% drop on Thursday saw the market pierce the indicator at 68,60 on its route to the 6,819 low of the day.

The FTSE 100 then staged a miraculous comeback, reversing higher to finish the day +0.35% and clear of the immediate danger.

The bullish momentum continued on Friday, and the price eventually recovered the broken trend line at 7,021, finishing the day at 7,059.

The market now looks likely to continue higher, and the obvious target is Monday’s high of 7,166. However, if the price fails to remain above the trendline (now at 7,130), it could well take another look at the 50-Day moving average below, signaling the immediate bullish call is invalid.

Don’t miss a beat! Follow us on Telegram and Twitter.

FTSE Daily Chart

ftse 100

Follow Elliott on Twitter.

Compare accounts

Related Posts:

More in Indices: