FTSE 100 Remains Stable Above April Monthly Low

Yesterday, the FTSE 100 snapped its downtrend as it stopped to create lower highs, a trend which had been in place since April 21.

The price rose to 6177 and appears to have created a higher low this morning, as it is leaving yesterday’s low of 6108 behind itself. We note that yesterday’s low of 6108 is a higher low in relation to last week’s low of 6054, this a pattern of higher lows and higher highs, indicating that the short-term trend is bullish.

However, we note that it could be a fragile short-term trend, as the slope of the downtrend in place since April 21 was steep and following a steep downtrend, it may take a few days for the bearish bias to wear off. With this in mind, some might view the last two days of price action as sideways rather than bullish. With this view, last week’s low of 6054 and yesterday’s high of 6177 are merely keeping the FTSE 100 trapped, and the true trend will not reveal itself until a break to this range occurs.

Beyond the above-mentioned price range, the following support and resistance levels are relevant. Support levels below last week’s low are the March 10 low of 6006 and the February 24 low of 5841. The resistance levels above yesterday’s high are the intraday high of 6210, formed in the afternoon of May 3, and the April 27 high of 6341.

We note that a break to last week’s low could draw the biggest attention, as price trading below 6054 would mean that price would be trading below the April monthly low of 6060. On price trading below its April low, the bullish trend in place since February might end. The sequence of higher swing lows since February is 5496, 5841, 6006, and 6060.

We note that the DailyFX Speculative Sentiment Index (SSI) is showing a reading of -1.4, implying that traders are net-short the CFD: UK100 and might provide a bullish bias to the UK100.

A Bloomberg News poll projects the U.K. Total Trade Balance deficit narrow from -£4840 to -£4200. This is the only U.K. data report on deck today.