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FTSE turns lower from resistance
The FTSE 100 is selling off sharply this morning, following a move into the crucial 6932-6955 resistance zone. A break through that zone would have provided us with a strong bullish signal. However, the current turn lower could set us up for a short-term period of weakness. Given that we have now seen an end to the creation of lower highs, there is reason to believe the current pullback will fail to create another lower low.
For now, we would need to see an hourly close below 6809 to bring expectations for further losses, with 6771 and 6754 coming into view. However, until we see an hourly close below 6809, there is the possibility for bulls to jump back on board, with a view that this morning represents a short-term hurdle.
Given that we are currently at the 76.4% retracement, it could be a cheap area for bulls to get in, based on the idea this is yet another short-term retracement within the recent uptrend. As it is turning lower from such a major resistance zone, it probably makes more sense to wait and see whether we break 6809 or not.