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Hugo in HTO Trading,

UK100: Reaching for long-term highs on a rising wedge

Yesterday European markets closed lower, as fears over Greece’s debt problems and concerns about whether the ceasefire between Ukraine and Russia will hold continued to make investors nervous.

Today on the economic agenda from the U.K we have the ILO unemployment rate (3M) in December that is expected to stay unchanged at 5.8% showing stagnation in the labor market and the Bank of England Minutes (BoE).

On yesterday session the UK100 initially fell but found enough buying pressure at 6,765 to turn things back up and manage to close near the high of the day. The index is in a rising wedge consolidation at the high of the year. The stochastic is showing a overbought market setting lower highs and price is making higher highs, signs that the upside may begin to get exhausted.

Expecting a downward move to a daily support at 6,792 (scenario 1) or even to a daily support at 6651 (scenario 2) on a bounce from a daily resistance at 6,874.5.

UK100 is a CFD written over FTSE100 futures.