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FTSE caution continues
The FTSE rally has certainly hit the buffers over the past 24 hours, with price action largely flat ahead of this weekend’s crucial Doha meeting. The four-hour chart shows there is a clear inability to break through the 6376 level, pointing towards the risk of a retracement lower.
Looking at the stochastic, it has been coiling upwards and is now significantly overbought and turning lower. A stochastic trendline break would provide a strong signal of a pullback in the FTSE. Ultimately, we would need to see a closed hourly candle below 6344 to provide a bearish outlook, with 6335, 6324 and 6295 the next levels of support in view.
Alternately, watch 6353 as a near-term support level that could provide another bounce towards 6376. A closed hourly candle above 6376 would likely spark another leg higher for the index, with 6447 the next major resistance level.