This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
FTSE 100 showing signs of wider breakdown
The FTSE 100 tumbled below the 7535 support level yesterday, pointing towards the possible beginning of a next period of weakness. The subsequent rally back into that 7535 level has been fleeting, with the respect of that previous support as new resistance pointing towards the potential for further downside.
Crucially, with yesterday’s fall below 7489, we saw a new three-month low for the index, and that may not be the end. A continued breakdown from here would move us out of a period of consolidation that has lasted two months, and instead take us into the next leg lower for the index. Until then, there is still a chance we will rebound to continue that two-month range.