FTSE is testing the previously broken downside resistance
What is happening with the FTSE-100 UK stock market Index? We are seeing the MONTHLY January candle touch and a test of 6730 for a breakout higher but we don’t have still a follow-through. Does this mean that the FTSE is heading lower? Should you be building the selling position…If we look at the monthly chart we can see that the Index is facing a strong upside resistance and a downside support 6730 but it still doesn’t mean that the downside reversal is in hands.
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At this point we can’t rule out a violent price action around the 6650-6700 zone we are testing now as this is exactly the strong support now for a downside continuation and a resistance to the upside. At the moment a sustained break above this zone will be a clear indicator that the downside reversal is invalid. We can see that clearly on the weekly chart below. The latest weekly price action is not encouraging for bulls and the upside support, if we will have a correction lower from here is at 6500.
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We have used the combination of the top-down trading analysis to get these key levels explained in the charts.
