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FTSE 100 Claws Back Losses, But Needs to Break 6012 To Turn Bullish

FTSE 100 Claws Back Losses, But Needs to Break 6012 To Turn Bullish

Alejandro Zambrano, Market Analyst

Talking Points

  • The FTSE 100 is short-term bearish below 6012
  • Global risk-aversion may keep the FTSE 100 down

The FTSE 100 is short-term bearish below Friday’s high of 6012 and a break to this level will turn the short-term trend bullish with the FTSE 100 possibly rallying to its January 5 high of 6164. Data supporting a bullish case is Friday’s U.S. Non-Farm Payrolls. The U.S. economy added 292,000 jobs in December, beating the Bloomberg news median-forecast which predicted a 200,000 rise.

However, at this stage with the DAX 30, S&P 500, and more importantly the Chinese CSI 300 trending lower, it would be fair to expect a softer FTSE 100 in the days ahead. Risk aversion holds a strong grip on the world’s financial markets and at opening on Sunday, the South African rand slid by 8.62% from its Friday closing price.

Some bearish traders will probably short-sell the FTSE 100 on a bounce, which will likely not exceed Friday’s high of 6012, while others will work with a break to the December 14 low of 5861. A break to this level may open the door for a decline to 6768 which is the August 24 low.

Bullish traders on the other hand will likely wait for a break to Friday’s high of 6012.

Improve your chances of having a great 2016 by following The Traits of Successful Traders.

FTSE 100 | FXCM: UK100

Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano

--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com

Contact and follow Alejandro on Twitter: @AlexFX00

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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