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FTSE falling back to key support zone
The FTSE 100 is moving sharply lower once more this morning, with price falling back into trendline and simple moving average (SMA) support (200 on four-hour). Below that we have the 76.4% Fibonacci support, thus forming a zone of support between 7306 and 7312. Should we break and post an hourly close below the 7306, it would go some way to showing we are set for further losses.
However, be aware of the wider trend of higher highs and higher lows. Until we break below 7262, the uptrend remains intact and thus it is worth being open minded that we could see a bounce. For that to occur, we would be looking for an hourly close above 7343.
That said, this chart is basically a case of taking a view over Trump’s healthcare bill. For those who expect it to pass, longs at 7306 seem sensible, on the basis the Trump trade will be back on. Otherwise, failure at congress could see the index finally break out of this trend, with a slide below 7262.