FTSE100 bounced strongly on Friday, backed by significantly weaker pound after election results were out. The index spiked to session high at 7544 in early hours of European trading, on bounce from 7410 low, hit after market opening.
Today’s bounce retraced 76.4% of 0.7587/7410 pullback, signaling that correction may be over. Strong support at 7517 (Fibo 38.2% of 7143/7587 upleg) managed to contain dip as expected,
with fresh upside attempts seen after correction. Pullback from session high at 7544 found support at 7477 (4-hr cloud base / 50% retracement of today’s 7410/7544 rally), which is expected to hold and keep fresh near-term bulls intact.
Slow Stochastic on daily chart is emerging from oversold territory and supports scenario of fresh upside action for full retracement of 7587/7140 corrective phase and possible extension higher, as outlook for pound looks negative on rising political uncertainty after UK election.
Res: 7512, 7544, 7570, 7587
Sup: 7477, 7461, 7431, 7410
