FTSE 100 soft on Monday

The FTSE 100 fell during the day on Monday, reaching towards the 7700 level to find support. This is an area that has both been resistive and supportive recently, but it looks as if the market is certainly struggling a bit. · FX Empire

Christopher Lewis

Updated Mon, May 28, 2018, 9:52 PM

The FTSE 100 has continued to show bearish pressure over the last couple of sessions, as it looks likely to test the 7700-level underneath, perhaps breaking down below there and go even lower. If we break down below the 7700 level, I think that the market will continue to go down to the 7500 level. Ultimately, I think that the 7500 level should be massive support, and essentially a “floor” in the uptrend as it is a large come around, psychologically important figure. I think that the level should hold, but if it doesn’t, that would be extraordinarily negative. If we turn around and rally it’s likely that we will continue to go much higher. I think if we can break above the 7700 level, then we could go even higher, perhaps reaching towards the 7900 level. If we can break above there, the market could go to the 8000 level after that.

If we did break down, I’m not sure where we would go next, so I would have to reevaluate the entirety of the situation. Currently though, I think that we will either bounce from where we are or find buyers between here and 7500. Longer-term, I still believe that we are going to go towards the 8000 handle but is going to take some time to get there. We have been a bit overbought, so I think that this pullback will end up being rather healthy and a good thing in the end as it offers plenty of value.