FTSE bounces from Fibonacci retracement
Yesterday’s pullback in the FTSE 100 saw the index bottom out at the 76.4% Fibonacci retracement. While we have seen the sellers come back into play overnight, the failure to create a new low is a worry. The crucial thing here is that in the medium-term, we remain within an uptrend given that the pullback from this week has not taken out any swing lows on the way down.
However, in the short-term we are clearly trending lower and as such, we would need a break through 6205 to negate this bearish view. Thus a closed hourly candle above 6205 would look like we are going to see a recovery, with 6235 the next major resistance to the upside.
Alternately, a closed hourly candle below 6175 would look for a move back towards the 76.4% retracement and crucially the 6107 level.