FTSE Continues Descent to Hit Five-Month Low
James Chen June 30, 2015 11:18 PM
<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.
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.
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