FTSE 100 Medium Term Short: Divergence, BB, Missed PivotsThe FTSE 100 is trading near 6950, up more than 1200 points from the post-Brexit low of 5727.
Fundamentally, this is because of the sharp fall in Sterling.
However, technically, the FTSE 100 may be due for a correction.
It has relentlessly traded upwards, however:
1) There is strong resistance to be expected at 7000, a psychological round number.
2) There is divergence on the 4H chart at 6950.
3) The FTSE 100 has traded outside its 800-period BB on the 4H chart for more than 2 weeks.
4) There are multiple missed pivots, monthly and weekly, amidst the FTSE's post-Brexit rally.
This might suggest that we are due for a correction in the medium term, perhaps to the 6700 level.
If Sterling recovers, the correction may extend to 6300. However this is unlikely given a dovish BoE, quantitative easing and the market pricing in further interest rate cuts.
