Forex Technical Analysis:FTSE Remains Bearish Against 7724 Resistance

Bottom line:  FTSE bearish structure remains intact until prices stay below 7724 levels go…

Bottom line:  FTSE bearish structure remains intact until prices stay below 7724 levels going forward..

Technical Analysis:

FTSE remains firmly in control of bears as the indice reversed sharply from 7696 levels, on January 20, 2020. Also note that bears have managed to break below initial price support at 7560, confirming a bearish reversal ahead. Any intraday/interday pullback or retracement should remain well capped below 7696 levels. The medium term wave counts are suggesting that FTSE might have finally terminated its corrective Wave 2 at 7696, and it should be heading sharply lower below 6570 mark as Wave 3 progresses. Looking at the larger wave structure, FTSE had dropped 5 waves lower from 7904 through 6539 levels earlier, labelled as Wave (1). The subsequent rally pushed through 7724 in a corrective manner, labelled as Wave (2) of the same degree. Please note that a 5-3 pattern is normally followed by another 5 wave movement in the direction of the major trend which is lower here. If the larger waves hold true, FTSE should ideally stay below 7724, and continue lower below the 6500 mark. Furthermore, the lower degree waves 1 and 3 within Wave (3) are also most likely in place at 7106 and 7696 respectively. If the short term counts are correct, prices should hold below 7696 (broadly below 7724) and push sharply lower as the 3rd of (3) rd wave progresses. Please note that a 5 wave drop from 7696 would drag prices much lower below the 6500 mark. A high probable trade setup from here is to remain short and also look to sell on counter trend rallies with protective stops above 7724 and potential targets below 6500 respectively. Also note that the weekly chart has also produced an Engulfing Bearish candlestick pattern confirming a potential reversal.

Prepared by

Harsh Japee, Technical Analyst.

 

FTSE Chart

 


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