FTSE 100 Gets Hammered, Looking to Go Negative on the Year
- FTSE 100 gets hammered below multiple support levels
- Looking for lower prices following relief bounce
- Levels of importance outlined
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On Thursday, we described the FTSE 100 as “treading close to a breakdown”, and had this to say, “The June trend-line which held the FTSE up from day one of the month is coming under siege again, and given where the market is trading it could become especially important should it fail to keep a floor in place.”
The three lows created since mid-March around the 7263/55 vicinity became a focal point of interest once the June trend-line was broken. Not only did those levels give-way to selling yesterday, but the first level of support below those bottoms clocking in at 7192 was proven not to be support at all. The next big level we have penciled in comes in at 7093, which aligns with the early-February low and highs from October. Should that level not hold, the market may look to support at the 200-day MA which currently clocks in at 7010.
From a trading perspective, unless you jumped on board intra-day yesterday as support levels cracked you were left with little to take action on. Buying as support was breaking certainly wasn’t in our playbook. Moving forward we will look for a recovery bounce to alleviate short-term oversold conditions before moving down to support. If the footsie is to head lower, it likely will have trouble making it much back above 7200 before rolling back over. On a drop to support under 7100 we'll pay close attention to how the market responds for cues as to whether it will hold or not.
FTSE 100: Daily
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.