The FTSE 100 when sideways overall during the day on Friday, testing the 7800 level for resistance. If we can break above the 7800 level, then the market could go much higher, and aim for my longer-term target of 8000. I believe that the 7700-level underneath is support, and I believe will eventually continue to offer buying opportunities and that area. A break above the 7800 level should send this market to the 7900 level, and then eventually 8000 as I mentioned previously. Further compounding things is the fact that the GBP/USD pair is testing a major uptrend line and could break down below there to make the British pound relatively cheap. If we do, it’s likely that traders will continue to jump into the FTSE 100 as it makes British exports cheap.

If we did turn around and break down below the 7700 level, then it’s likely that the buyers will have to go looking to lower levels. That would essentially be a “reset” in the market, so I think that you would have to look at the longer-term charts to start buying. I have no interest in shorting this market yet, at least not until we break down below the 7500 level, something that doesn’t look very likely to happen in the short term. A breakdown below that level could send this market down to the 7300 level, and then possibly even the 7000 level. However, I think things are lining up for the British pound to be softer, which should help the FTSE 100 in general.

FTSE 100 Video 21.05.18

This article was originally posted on FX Empire

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