FTSE Continues Descent to Hit Five-Month Low

<p>The UK 100 (daily chart shown below), representing the benchmark FTSE 100 index, dropped on Tuesday even further below Monday’s Greece-driven plummet to hit a […]</p>

The UK 100 (daily chart shown below), representing the benchmark FTSE 100 index, dropped on Tuesday even further below Monday’s Greece-driven plummet to hit a new five-month low.

The week began with investors around the globe anxious over the Greek debt crisis, causing the major global equity indices to tumble. This could be most readily seen in the European indices, most notably the DAX and the FTSE.

In the case of the FTSE, the drop on Monday triggered a price gap to the downside, below key prior support around the 6650 level. As Monday wore on, the index attempted to rebound and fill the gap, but ultimately retreated once again and closed near its lows of the day.

FTSE Daily Chart

 

Tuesday began in rebound mode, but quickly turned bearish again amid Greece talks and dropped to further lows by late afternoon.

The FTSE has not yet entered into correction territory from April’s all-time high around 7100, but has been entrenched within a sharply declining channel since the beginning of June. This week’s plunge prompted an acceleration of that decline below the channel.

Having gapped down below the noted 6650 previous support level on Monday and then the 6500 support level on Tuesday, short-term momentum has been decidedly bearish, and the index could potentially see further volatility and downside to come.

In light of continued uncertainty surrounding the Greece situation, any sustained trading below 6500 could target a key downside support objective at 6300.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.