FTSE 100 Retraces After Testing Key Resistance Zone

Market Analysis – December 11

The FTSE 100 index, following its consolidation from June through October, displayed a notable bearish structure before shifting into a bullish trend. This change in market dynamics initiated a price rally that recently tested the critical resistance zone at 8406.0, prompting a corrective pullback. Despite the retracement, the broader market outlook remains bullish, supported by structural and technical indicators.

FTSE 100 Key Levels

Demand Levels: 8200.0, 8145.0, 7918.0
Supply Levels: 8500.0, 8600.0, 8700.0

FTSE 100 Long-Term Trend: Bullish

The long-term trend continues to favor the bulls. The Stochastic indicator highlighted oversold conditions as the price dipped below the 8145.0 demand level, leading to the formation of a swing low. This shift triggered a bullish structural change that drove the price rally.

In early December, the index approached the key resistance level of 8406.0, where the Stochastic indicator signaled an overbought market. This overextension has resulted in the ongoing bearish pullback, which is seen as a natural correction within the broader bullish trend.

FTSE 100 Short-Term Trend: Bullish

In the short term, the index has rebounded from a lower timeframe support level at 8251.0. A confirmed break above 8406.0 could pave the way for the FTSE 100 to achieve new all-time highs, with supply levels at 8500.0 and beyond serving as potential targets.
With the bullish market structure intact, the current correction phase is expected to conclude soon, offering traders opportunities to align with the prevailing upward trend. Leveraging forex signals could enhance the timing of entries and exits, given the evolving market conditions. The FTSE 100 remains well-positioned for continued upward momentum, assuming the correction resolves and external market factors remain favorable.

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