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. See full non-independent research disclaimer and quarterly summary.
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.