- FTSE slipped below major support, but back above for now
- Whether it can and for how long it can remain above is unclear
- Much work needed on the top-side to regain confidence from the long-side
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The FTSE slipped below significant support on Friday via the 7100-threshold and February 2016 trend-line, but since earlier in the week it has recaptured both of these noteworthy levels. It made for a bit of a fake-out for those looking to follow momentum lower.
How long the footsie can stay above its recently reclaimed support is unclear. The bounce so far isn't all that powerful, giving it a corrective look, so it may not last very long. On the top-side there is a very steep trend-line running lower and given its angle it's not viewed as likely to be very influential. Nevertheless, we'll watch to see how the market reacts to it on a test.
Looking lower, the area right around 7100 will still be supportive even though a close below took place last week. Yesterday's jab lower and reversal higher started at 7109. With renewed selling pressure eyes will be on the recent low at 7062. A close below will have the market on its heels again and at risk of a deeper decline unfolding.
Looking higher, it will take some work to turn the picture convincingly bullish at this time. We'll need to see some power behind a bounce which is sustainable before gaining confidence from the long-side.
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---Written by Paul Robinson, Market Analyst
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