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The FTSE 100 index is flirting with a break that could help it close the week in positive territory and escape the falling channel of the last few weeks. That said, for those of you who have remained active in the markets between Christmas and New Year, after some impressive moves both down to and up from fresh 2 year lows, and some sharp reversals along the way, it may be prudent to remain sceptical until proven othersise.
What do we need now? Much like I said this time last week, a meaningful breakout above 6740 to escape the December channel and overcome the more shallow falling highs. This would allow the index to extend its bullish reversal towards mid-December highs.
Bulls are looking for a break above twin falling highs resistance around 6740, to escape the 2-week falling channel, and for a challenge on 6800. Bears require a breach of 6700 for another journey south to finish the year around the lows.
Our watch levels: Bullish 6740, Bearish 6700
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