The FTSE 100 re-assumed its climb above the 6,800 points but can it hold on these levels?

The FTSE 100 re-assumed its climb above the 6,800 points but can it hold on these levels?

The FTSE 100 was all about gains last week as it moved higher during almost all of the sessions. The London index has been showing signs of its bullish intentions from the previous week but the plane crash in Ukraine and the tensions there turned the tables. However, last week the FTSE re-assumed its bullish trend and managed to climb back above the 6,800 points.

The release of the minutes from the Bank of England meeting on monetary policy revealed that there is no urgency to raise interest rates within 2014 as the slack in the employment sector and the wages’ growth is still considerable. This translates to the current accommodative policy remaining intact for the foreseeable future and the FTSE benefited from this development. Furthermore, the PMI reports from the Euro-area shows encouraging signs of progress and that helped the London benchmark index as well.

For this week the important question is whether the uptrend will continue and make its way towards the 6,850 points and above. From a technical standpoint, the momentum behind the uptrend seems to be diminishing and there are signs of exhaustion. Does this mean that the FTSE 100 will reverse lower?

Not necessarily, there is a number of scheduled events that are very important and will definitely affect the investment sentiment over the next 5 days. This week we have the Fed meeting on the tapering agenda on Wednesday, the Non-Farm Payrolls employment report on Friday and several other events that will dictate the tempo of trading.

So even though the technical indications suggest a slowdown and possibly a reversal I would be very careful and keep an eye on the expected reports. The pivot point for me to the downside lies at the 6,750 points and to the upside the 6,880 points is the main resistance and we’re certainly in for a very interesting and probably volatile week.

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