Good morning Traders!
I’ve been actively monitoring the markets since 2007, and it’s most unusual to see the U.K.’s FTSE index, or Germany’s DAX index behave as bullishly as they are currently, especially when they historically look to the U.S.’s indices for direction.
This last year has seen the FTSE handle a major market correction distinctly better than the U.S. Normally, this could spell disaster for non-U.S. markets, as they take a harder hit, but not this time.
Looking at the weekly chart, we can see that the FTSE has remarkably broken through major resistance levels, and travelled to fresh all-time highs. This feat alone is something to pay attention to.
Often, after a resistance level has been broken, price will return to test that level from above, to see if it can hold as support.
Looking to the second chart here, we can see that price is already considering heading back down to this level.
As in both the weekly chart above and the daily chart below, there are key historical levels that are most likely going to be the future support levels where price will turn IF the trend is to continue in the future.
During this period, the price action seems almost reluctant to head lower, almost as if it’s being forced against its will; There’s a lot of wicks below each candle.
Traders will likely be watching for significantly bullish patterns to form at the two closest levels for signs that support has been found after this retracement and that the market is ready to resume its bullish uptrend.