The FTSE 100 has started the year by pushing to fresh all-time highs in the opening sessions of January. The key question now is not about speed or momentum, but whether the move can hold as normal trading volumes and full market participation return this week.
A strong start, but a familiar backdrop
The FTSE enters 2026 following a strong year, but the drivers of that performance are important when assessing whether this latest move can stick. The index is heavily weighted toward financials, mining and energy, sectors that tend to perform best when global growth holds up and inflation expectations remain anchored rather than collapsing. That mix has helped the FTSE push higher without relying on the kind of valuation expansion seen elsewhere.
Those sector dynamics have remained in play into the new year. A softer US Dollar Index and firmer metal prices have continued to underpin mining stocks, while banks have benefited from a steadier rates backdrop and resilient earnings expectations. At the same time, fresh geopolitical headlines, including US intervention in Venezuela under Donald Trump, have added risk on paper without triggering a sustained move higher in energy prices. That lack of reaction suggests markets are comfortable treating the episode as noise rather than a catalyst, leaving sector-led flows firmly in control.
What the price action is telling us
From a trading perspective, the sequencing of this move matters. The FTSE spent the Christmas period locked in a tight, low-volatility range before breaking higher and closing above resistance in the first full sessions of the new year. That shift from compression to expansion is often where meaningful moves begin, but only if the breakout can hold once normal participation returns.
The focus now is on behaviour around the former resistance area. Credible breakouts tend to see old resistance act as support as volume rebuilds, with buyers willing to defend the level rather than chase price higher. So far, price has remained above the breakout zone, suggesting the market is attempting to build acceptance rather than immediately reject the move.
The risk case is straightforward. A close back below the breakout candle on elevated volume would point to a failed move, signalling that the break higher was driven more by thin conditions than genuine demand. Until that happens, the structure argues for treating this as a breakout that remains intact, with the next few sessions likely to be decisive as real volume re-enters the market.
UK100 Daily Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 85.24% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
A strong start, but a familiar backdrop
The FTSE enters 2026 following a strong year, but the drivers of that performance are important when assessing whether this latest move can stick. The index is heavily weighted toward financials, mining and energy, sectors that tend to perform best when global growth holds up and inflation expectations remain anchored rather than collapsing. That mix has helped the FTSE push higher without relying on the kind of valuation expansion seen elsewhere.
Those sector dynamics have remained in play into the new year. A softer US Dollar Index and firmer metal prices have continued to underpin mining stocks, while banks have benefited from a steadier rates backdrop and resilient earnings expectations. At the same time, fresh geopolitical headlines, including US intervention in Venezuela under Donald Trump, have added risk on paper without triggering a sustained move higher in energy prices. That lack of reaction suggests markets are comfortable treating the episode as noise rather than a catalyst, leaving sector-led flows firmly in control.
What the price action is telling us
From a trading perspective, the sequencing of this move matters. The FTSE spent the Christmas period locked in a tight, low-volatility range before breaking higher and closing above resistance in the first full sessions of the new year. That shift from compression to expansion is often where meaningful moves begin, but only if the breakout can hold once normal participation returns.
The focus now is on behaviour around the former resistance area. Credible breakouts tend to see old resistance act as support as volume rebuilds, with buyers willing to defend the level rather than chase price higher. So far, price has remained above the breakout zone, suggesting the market is attempting to build acceptance rather than immediately reject the move.
The risk case is straightforward. A close back below the breakout candle on elevated volume would point to a failed move, signalling that the break higher was driven more by thin conditions than genuine demand. Until that happens, the structure argues for treating this as a breakout that remains intact, with the next few sessions likely to be decisive as real volume re-enters the market.
UK100 Daily Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 85.24% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.