The FTSE 100 went back and forth during the trading session over the last week, but the Thursday session was mainly negative. Because of this, I think we are trying to decide where to go next as we have been consolidating in a 75-point range. If we can break down to a fresh, new low, then we will probably go down to the 7200 level which is the bottom of the longer-term consolidation area that extends all the way to the 7600 level above. The 7400 level is essentially longer-term “fair value”, and the fact that we have broken down below there, it’s likely that the bearish pressure will win in the short term. Keep in mind that a lot of the issues in the market probably revolve around the negotiations with the European Union, and not so much fundamentals as far as specific companies.
Longer-term, I think that this short-term selling opportunity will turn itself around to be a nice-looking buying opportunity that could give you 400 points profit. However, in the meantime I think we are more likely to see a “sell the rallies” type of situation. I would not be a buyer without a pullback closer to the 7200 level unless we closed above the 7400 level on the daily chart. I suspect that small position sizes are necessary, as the volatility will probably get worse before it’s better, and therefore caution is the better part of valor in this market. This will also be important today because of the Nonfarm Payroll Number coming out of the United States which will influence the US dollar, which by extension will influence the British pound, which by extension then influences the FTSE 100.
FTSE 100 Video 08.12.17
This article was originally posted on FX Empire