This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Inverse head and shoulders formation sees FTSE break higher
The FTSE appears to be in a recovery phase, following the break above 6752 this morning. That level represented the neckline of a head and shoulders formation and followed on from a higher low set on Friday. The target derived from the formation comes in at 6870, which coincides with the peak on 11 June.
As we stand, the price looks likely to reach the 6808 resistance which is a major May support level that has held twice. As such, I expect to see the bullish momentum start to run out of steam soon; however, the question is whether this marks the beginning of a more bullish phase of trading.