Forex Technical Analysis:FTSE Continues To Hold Below 7724 Resistance

Bottom line:  FTSE bearish structure remains intact with prices holding below 7724 resista…

Bottom line:  FTSE bearish structure remains intact with prices holding below 7724 resistance for now.   

Technical Analysis:

FTSE bears are expected to regain control anytime soon, as bulls unable to break above 7724 mark, which is potential Wave (2). The overall structure since 7904 highs on May 22, 2018 is still holding a bearish bias after having completed a 5-3 classic Elliott Wave pattern. The drop from 7904 through 6539 earlier was in 5 waves labelled as Wave (1). A corrective rally towards 7724 is potential Wave (2), which should be ideally followed by a 5 wave drop at the same degree. If the above count holds, FTSE should stay below its 7724 highs, and push lower below 6539 levels going forward. Until now, the structure has held resistance at 7724 keeping bears in control. The short term wave counts also suggest that the bearish trend should resume soon, if FTSE holds below 7724 levels. Looking further, the price action since potential Wave (2) seem to have unfolded lower degree waves 1 and 2 at 7035 and 7690 levels respectively. If the above holds, we should witness a 3rd of (3) rd wave, pushing lower towards 6569 quite sharply. A break below 7500 would confirm that a meaningful top is in place at 7690 and FTSE is back in control of bears. Hence, a high probable trade direction from here can be expected on the south side, with protective stops above 7724 and potential targets below 6569, going forward. Also note that a great deal of Technical Bearish Divergence is on the show with major markets hitting fresh highs with FTSE holding below immediate resistance. This could be yet another indication of a potential trend reversal. Even if prices manage to break above 7724, it would be marginal and just temporary before FTSE finds resistance again.

Prepared by

Harsh Japee, Technical Analyst.


FTSE Chart


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