Is the FTSE 100 price heading to 7,500? This chart says it might

Summary:

The UK's FTSE 100 has lagged the performance of the major US stock indices. However, it may soon start to play catch up to its peers from across the pond.

The UK’s FTSE 100 has lagged the performance of the major US stock indices. However, it may soon start to play catch up to its peers from across the pond.

FTSE 100 closed at 7,157, up 7.6 points (0.11%).

The FTSE suffered its quietest trading day in quite some time with the US markets closed, following Sundays’ 4th of July celebrations. Today, the States is once again open for business, and its stock market will be eyeing the latest in new all-time highs.

The British economy is close to its full reopening date on the 19th of this month. Furthermore, Prime Minister Boris Johnson, yesterday relaxed quarantine measures for travellers returning from medium-risk destinations. However, this only applies to the 33 million Brits that are fully vaccinated.

Further encouraging signs for the FTSE 100 price include the ongoing bidding war for UK supermarket chain Morrisons. And, as strange as it sounds, the England football team’s successful campaign at the European championships.

The hospitality industry has been a key beneficiary of more than a few celebratory pints of beer over the last few weeks. And pub chains, for one, will be hoping the young lions can secure a place in the final when they play Denmark on Thursday.

Of course, there is some risk associated with the delta-variant strain of the virus. Although over 50% of the population have received two doses of the vaccine, so hopefully, the worst is way behind us.

FTSE Index technical outlook

The daily price chart highlights a rising wedge channel that has been in place since the crash of March 2020. The lower end of the trend channel runs from November and supports the price, around 7,050.

The rising resistance line is now visible at 7,260. Moreover, If the index closes above this trend line, it will target a multi-year downtrend at 7,490. However, if the country can keep a lid on the new virus strain, I project the FTSE 100 could exceed this price and extend towards 7,700.

Nonetheless, the 50-day moving average, at 7,059, is close to the rising support. Therefore, this should be classed as an important threshold. And should the index close beneath 7,050, it would invalidate the immediate bullish outlook.