FTSE bounce reaches major support
The FTSE has seen a strong move higher overnight, following a similar move in the US indices. However, we have once again reached the crucial resistance level of 6123, which represents the December 2014 low. Given that the previous bounce on Tuesday failed to fully touch this level, this marginally counts as a new high, and thus it would still look relatively bullish as long as any selloff remains above 5940. Any downside would have to contend with the 6070 mark first, and I believe this 6070-6123 zone will dictate the state of play for the day. A move below 6070 would likely take us to 6023 and the ascending trendline.
As things stand, we appear to be trending within a rising wedge or ascending triangle, which will be dictated as time goes on. An ascending wedge in a downtrend is bearish whereas an ascending triangle is bullish, and thus the possible respect of this upper ascending trendline will be key should we see a breakout higher.
Ultimately, I expect a break below 6070 to point towards a move to 6023, whereas a move above 6123 would look towards the 6200 mark.