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FTSE’s break below 6300 points to further downside
The 6300 support level certainly held for a while yesterday but ultimately it gave way, and crucially the daily candle closed below this crucial support level. As such, we have now created a new low, which points towards further downside to come for the index.
The doji candle posted already this morning points to the possibility of a short-term move higher, yet should that occur, I would expect the market to turn lower once more below the Monday swing high (6360).
The indication that we are set to see a move higher this morning will be sparked by a move back above 6300. Thus, should the price move above 6300 in the near term, I would expect it to turn lower below 6350.
Whether this retracement occurs or not, I am bearish as long as the price remains below 6350, with a move to the next support level of 6252 likely to be on the cards. Beyond that, I could see it returning to 6175 in the medium term.