FTSE forecast: today possible decline followed by a rally.
As you can see the pound looks bearish, if it is tracing out a triangle [a,b,c,d,e (circle)] the next move is wave d (circle) down to 1.2400. If this happened and the S&P declines, the FTSE will decline but the decline won’t go far. The alternative is a break above the upper line at 1.2520, this would be bullish for GBP/USD, if this happens and the S&P declines, the FTSE would go down fast and it could go to 7200. Today we have the latest UK retail sales numbers at 9.30, this will have an influence om the pound, if the number is strong the pound will rally.
With regard to the FTSE forecast, the rally is already in three waves [(a),(b),(c)] and I expect a pullback today. Logically this pullback should be the start of a long decline but if I look at the S&P, the S&P has one more leg up to new highs before a long decline starts. It is unlikely the FTSE will start a long decline now while the S&P rallies to new highs next week. So chances are the pullback will be wave (x) of a potential double zigzag, and when this wave is complete near 7220, the FTSE will rally to 7340 next week to complete wave (y) of b (circle).
There is also an alternate scenario on the following chart:
FTSE forecast: Because the decline from the top of wave 3 is not a clear impulse wave, it could be a corrective wave which is wave 4. In this case the current rally is wave 5 which is an impulse wave [(i),(ii),(iii),(iv),(v)]. The pattern is different but the forecast is the same. The pullback is wave (iv) and the next move is a rally to new highs for wave (v).
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