FTSE moving into key Fibonacci retracement
The FTSE is moving sharply lower this morning, following on from a rally into the 6180 area yesterday. The index has been in a range in recent weeks and as such, it was always likely this recent rally was on borrowed time.
Of particular interest was the break below 6121 this morning, with price subsequently rallying from the 6108 support level. It is notable that we are unlikely to see an hourly close below this support level though, which could be a warning sign the rally is not over.
Despite this, selling into this rally is favoured, with 6158 (76.4%) representing a good 3/1 risk/reward for a move back to 6107 rather than breaking through 6173. Should we see further downside, support levels of note are 6108 and 6095, on the way to the range bottom of 6060.
Should price break back through 6173, then the 6200- 6220 resistance zone is likely to mark the top of this rally.