FTSE 100 has a wild ride during Thursday volatility

The FTSE 100 initially rallied a bit during the trading session on Thursday, breaking towards the 7725 handle before falling rather drastically to test the 7650 level, an area that was previous resistance. That area of course should be support, and quite frankly it’s not a surprise that it acted so. The tariffs being applied by the Americans to the European Union obviously has somewhat of an effect against the United Kingdom, even if it is just temporary. I think the longer-term, the currency markets will continue to drive where this market goes as well, and the British pound selling off, and I think it should rather soon, should continue to put upward pressure on this market as well.

Traders don’t like uncertainty, and then they begin to sell first and ask questions later. That’s exactly what happened during the day on Thursday as computers take over thought, and traders take a break. Ultimately, this is a market that I think does try to go higher but clearly we need to get a bit of momentum going, perhaps a break above the 7725 level is in order to start putting money to work again. This is of course unless you but where the support was to be found at 7650. If we break down below 7650, it’s likely that we will then go looking towards the 7600 level. I am constructive longer-term but recognize we have most certainly seen a lot of negativity as of late and it will be a difficult rally.

FTSE 100 Video 01.06.18