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FTSE breaking lower bringing possibility of big selloff
The FTSE was breaking below some key levels on Friday, bringing about an increased chance that we are actually seeing something quite notable here. A move out of the wedge formation preceded a break below key support at 6356 and has since continued to fall.
The gap lower over the weekend is likely attributed to weak Chinese data, yet ultimately the trend appears to be clearly defined as favouring further downside.
There are two major support levels to take out before we see the selloff really take shape, in the form of 6300 and 6252. Thus watch out for those levels, but for now we are creating intraday lower highs and lows, which I expect to continue. This would mean that the current bounce is likely to be short-lived, and I would expect it to turn lower below 6376 resistance. Also be aware of 6337 resistance, which is the gap open.