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FTSE sells off back into trendline support
As mentioned, there was always going to be a threat to yesterday’s upside in the FTSE given the existence of resistance between 6635 and 6650, with the former marking the highest point of price action prior to an overnight sell off. This brings us back to the ascending trendline which has provided substantial support over the past month. The likeliness is that we will sell into it, at 6550 and then the manner in which price responds to 6550 and 6530 – Wednesday’s low – will determine direction going forward.
Thus any move below those levels would bring us into a scenario where we could see a move down towards 6489, whereas should price start to reverse – look for hammers, inverse hammers, bullish engulfing patterns, etcetera – it could be a good point for the bulls to come back to the fore and start turning us towards 6650 and even 6720.