Technical Break Opens Door For Further Losses

FTSE 100 Price Outlook:

FTSE 100 Forecast: Technical Break Opens Door For Further Losses

The FTSE 100 was on pace for a relatively calm Thursday session until it joined the Nasdaq 100 and other US indices in their declines as selling pressure took hold of the major markets. While the technology sector seemed to be the root of the declines, the FTSE 100 was not immune to the shift in risk appetite. Further still, the FTSE 100 suffered an arguably worse outcome from a technical perspective.

FTSE 100 100 Price Chart: 4 – Hour Time Frame (April 2020 – September 2020)

To that end, losses saw the index experience a key technical break beneath support that had help keep the FTSE afloat since late May. Residing near 5,890, the level suffered a brief breach earlier this week but the final blow was dealt in Thursday’s rout. Now with support in the rearview, bears can look to extend their attack lower.

A Guide to Support and Resistance Trading

Subsequent support is rather sparse near current prices. While intraday levels may exist, I would argue the next major level rests near the 5,680 which coincided with two reversals in May. Thus, there could be some open air beneath the FTSE 100. Still, losses are not assured and September is known for volatility so price swings could become more drastic in the days ahead. In the meantime, follow @PeterHanksFX on Twitter for updates and analysis.

–Written by Peter Hanks, Strategist for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

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