FTSE 100 breaking lower after shallow retracement
The FTSE 100 has dropped back into the overnight lows, following on from a relatively shallow retracement throughout the morning. Given the drop below 7240, a more bearish outlook is in play for the time being. Should we see an hourly close below 7240, this would be another sell signal for the index.
That being said, this looks like a retracement of the wider 6955-7296 rally, and as such, it makes sense to look for this sell-off to bottom out around the Fibonacci retracements. It is likely that we will retrace 50% at the minimum, and thus, this sell-off should drop to 7125 at least before we turn higher once more.