Can the FTSE 100 hit 6,900 points?

…or is the uptrend losing momentum?
The FTSE 100 has been on the rise for a couple of weeks now and even though the first leg of this uptrend was expected the continuation above the 6,700 points barrier has been a positive surprise.

 
The London benchmark has rebounded off its 6,500 points support on mid-April and ever since it has all been a push higher for the index. We discussed last week that the 6,700 points resistance would be a difficult one for the FTSE to overcome but the encouraging economic results this week allowed it to continue climbing and reach 6,800 points.

 
The improvement in the British Retail Sales and the Gross Domestic Product releases along with Germany’s higher inflation reading helped the main index to steam upwards. All these releases might have printed slightly lower than expected but all of the figures were better than the previous months’.

 
Now the FTSE is trading ahead of the previous highs on January and February and the 6,830-50 area is another obstacle in its way. In my opinion the rally higher might have to stall ahead of these highs but it all depends on the economic releases next week.

Today, the US jobs report is expected to illustrate an improving outlook for the domestic labour market and the FTSE might capitalize on that. However, the Services PMI reports next week could have a more substantial impact on global stock markets and the FTSE of course. If the figures print strong then the UK index would have no problem to hit 6,900 points soon. On the other hand, if we see a slowdown then a retracement lower should be expected.

 
To sum up, I am neutral towards the FTSE 100 over the next week since its outlook is closely correlated to the scheduled events, I regard the 6,830-50 area as the pivot point for the current uptrend. If the figures print strong and the FTSE clears it then we’re looking higher, otherwise I am looking at 6,750 as a possible support.

 
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