This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
This week the FTSE 100 extended its pullback from 2019 highs. Déjà vu? You’re not mistaken. I wrote the same last week. The index even broke below 7300 to test 7200, a level we are re-testing as I type.
Will this prove a mini-range which helps the index bottom out? Or is it merely a within the current sell-off, before yet another next leg lower?
Bulls need a break back above 7220 (lows of this morning) for another rally back to 7280 (current channel ceiling). An upside escape from this channel, and a break above 7300, could be just the evidence required of a bullish reversal towards 7500, the levels we traded but two weeks ago.
Bears, on the other hand, require only a breach of 7190 (support, channel floor) to open the door for a drop back to mid/late-March lows of 7159. Below that, we’re talking about March lows around 7082.
The outcome of the US-China trade talks this weekend could have a big effect on where the index opens on Monday.
Our watch levels: Bullish 7230, Bearish 7180
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