The FTSE 100 had a volatile session on Wednesday, initially bouncing from the 7380 handle, but turned around to find resistance at the 7440 handle. We also had comments coming out of Mark Carney from the Bank of England that perhaps interest rates would have to be raised rather quickly if there was a global boom. This shows that the Bank of England is perhaps looking at the global market, and starting to show signs of being concerned. This being the case, the market could very well find itself reaching towards the lower levels and breaking down as the British pound shot through the ceiling during the day. That of course weighs upon exports when it comes to the United Kingdom, and that of course works against the value of the FTSE 100 itself.
Alternate scenario
If the British pound were to suddenly turn around and start falling, the market could break above the 7400 level, and then go looking for the 7450 handle again. There is a slight gap of that area, so expect to see a little bit of resistance. Ultimately, a break above the 7400 level that holds itself above the level for couple of hours, that has a very strong sign. I think that if we can break above there, the market then goes to the upside. We could eventually break above the 7450 handle, then the market could go to the 7500 level. If we did breakdown below the 7380 handle for more than an hour, I feel that the FTSE 100 will go looking for the 7350 level after that. This market continues to be very volatile, and I believe that the market will continue to favor short-term trading as there are many moving pieces when it comes to the United Kingdom and the divorce from the European Union.
FTSE 100 Video 29.6.17
This article was originally posted on FX Empire