FTSE 100 Forecast: FTSE 100 Heading Toward Top of Range Again

• The FTSE 100 has been very bullish during the training session on Friday, as we broke above the 7600 level.
• The 50-Day EMA has been broken through and it’s likely that we continue to go higher, at least until we get to the 7800 level.
• The 7800 level has been an area of extreme resistance previously, it would make a certain amount of sense that it holds as a bit of a barrier.

At this point, I think pullbacks to the 50-Day EMA offer buying opportunities, especially with the 200-Day EMA underneath their offering support. The 7550 level is right around where those 2 moving averages currently reside, therefore I think it’s likely that we continue to see that as an area of importance. While the market did rally rather significantly, we gave back a little bit at the end of the day, but I think part of that would have been position squaring heading into the weekend. All things being equal, this is a market that I think is doing everything it can to reach the top of the range, and a lot of questions will be asked about it once we reach it.

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Breaking Above 7800

If we were to break above the 7800 level, then I think it opens up a move to the 8000 level in the FTSE 100, as momentum in a certain amount of “FOMO trading” could come back into the market and send the index much higher. This of course will be in conjunction with a lot of other indices around the world as they all look very bullish, as traders are waiting to see whether or not central bankers are going to do everything, they can to loosen monetary policy.

It is worth noting that the British pound has been rather stagnant, so we will have to see how that plays out. If the British pound suddenly starts to pick up momentum against the greenback, it’s possible they could put downward pressure on this market, but I think there is a significant amount of support near the 7400 level and that would be your first floor. Underneath there, you have the 7230 level which is a massive support level that I do not think it’s broken anytime soon. In the short term, I still think we go higher.