What's inside :
- The FTSE continues to fall back into support
- It's late August, keeping trading size reduced and being more selective
- Yellen speaking in Jackson Hole today
Since discussing the FTSE 100 (FXCM: UK100) on Tuesday, the index has continued to gradually fall back into support, taking the shape of a bull-flag/channel. The confluence of support in the form of July highs and rising lower parallel from early July is presenting an interesting spot from which the market should begin to turn higher if the recent descent is indeed constructive in nature.
Yesterday, a small reversal was experienced from right around the intersection of support, but a firm press lower into support and shove higher would act as a better signal the market is ready to continue its advance since the 'Brexit' lows. A break above the top-side trend-line of the bull-flag/channel formation will confirm the hold of support. Should the FTSE drop with conviction below both the July peak levels and lower parallel, then alternative routes will need to be considered.
FTSE (UK100) Daily
It's late August, so the summer doldrums continue, making trading more difficult for those operating onany time-frame. This means it's a good idea to continue trading with smaller size and more selectivity until market participation comes back into the market. Volume and volatility at some pointwill come back into the market, but until then we want to carefully navigate the current environment and keep our powder dry for when conditions are more conducive for making money.
Today, the Fed's Janet Yellen is speaking in Jackson Hole, Wyoming. It can be a big deal, but not always. The feeling on this end is it will be a rather uneventful event this time around,but , traders should remain on their toes should the Fed-head say something which leans further to the dovish or hawkish side than is expected, and shoves US markets around which in result impacts other global markets as well.
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---Written by Paul Robinson, Market Analyst
You can follow Paul at @PaulRobinsonFX.
You can email him at email@example.com with any questions or comments.
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