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The FTSE 100 technical analysis forecast for 2014

Article By: ,  Financial Analyst
February 7, 2014 10:49 AM

What did we see from the FTSE in 2013?

The FTSE 100 (a daily chart of which is shown) has shown little sign of relenting in its long bullish run that has closely mirrored other major global indices.

From its most recent significant upswing to the 6819 peak at the end of October 2013, the FTSE corrected down by almost six percent to its December low of 6417, before rebounding.

This rebound occurred in a highly significant technical price area, as it closely conformed to a major bullish trend line extending back to the mid-2012 lows at around 5225.
FTSE technical analysis chart

 

 

The index dipped slightly below this trend line, as it did after a similar correction in June, but the rebound that began in mid-December has been swift and sure – breaking out above a short-term counter-trend resistance line drawn from the noted 6819 high.

This rebound provides a strong technical indication of the continuing strength of the entrenched uptrend after the most recent corrective pullback.

The 50-day moving average is also rising steadily above the 200-day average, which has generally been the case since August 2012.

The FTSE forecast for 2014 – what could we expect?

Currently, the index has been in a tight flag-like consolidation since the beginning of 2014, not far below its October 6819 high.

Moving further into 2014, the FTSE will need to break above its long-term high of 6876 (established in May 2013) in order to assert a continuation of the entrenched bullish trend.

Such a breakout could put the index on track to target first its 6950 all-time high (established at the end of 1999), and then potentially the 7000 psychological resistance level.

Key downside support on another potential pullback currently resides around the 6530 level.

 

Interested in what the year might bring for the major currency pairs? Check out the other articles in this series:

GBP/USD forecast for 2014
EUR/USD forecast for 2014
USD/JPY forecast for 2014
AUD/USD forecast for 2014

 

You can also read James’ 2014 predictions on Gold, here.

 

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