FTSE continues to hold below major resistance carved around 6520 levels on June 08, 2020. The indice had dropped below 5800 mark before pulling back higher again. It is seen to be trading close to 6050/60 mark for now, as bears prepare to resume lower again.
FTSE probable wave counts are as follows: The indice had dropped from sub 6500 through 5931 mark as an impulse wave, labelled as potential Wave 1. An impulse drop is ideally followed by a corrective rally and the indice pushed through 6300/30 levels marked as Wave 2.
Since then, FTSE has managed to carve lower lows and lower highs holding the bearish structure. If the above holds well, prices should stay below 6350 and broadly below 6500, going further. Also note that potential Wave 3 could terminate around 5575 levels respectively.
Looking at the recent wave structure, FTSE might be retracing the bearish drop between 6300 and 5776 respectively. The fibonacci 0.618 retracement of the above drop might be seen towards 6100 levels and bears might be inclined to take control from there.
Also note that trend line resistance since 6500 highs is passing through 6200 levels for now. Any intraday rallies through that levels is expected to face stiff resistance. Only a sustained break above resistance trend line would change the bearish structure.
Traders might be preparing to initiate fresh short positions between 6100/6200 levels, going forward. Protective stops would go above 6500 mark and projected targets below 5575 respectively.
Technical Analysis Team
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