See important Research Disclaimer.
FTSE weakness looks temporary
Yesterday saw the FTSE continue to grind lower, with Friday’s support level of 6388 providing new resistance to cap yesterday’s move lower. This looks a lot like a short-term phenomenon for now and I would need to see the price break back below 6300 to gain confidence that we are actually seeing a selloff of substance.
For today, I would expect a resumption of the bullish trend should the price break back above 6388 in the near future without breaking below 6350 first. However, further short-term downside is certainly a possibility, and given the fact that all previous retracements have seen long lower shadows for the candle that ultimately marks the bottom, I would like to see this happen again.
Overall I am bullish unless the price moves below 6300, with 6344 support and 6388/6455 resistance providing my levels to watch in the short term.