FTSE managed to recover and emerge above daily cloud (cloud top lies at 7241), following spikes lower that penetrated deeply into cloud, yesterday and today.
Repeated strong downside rejections are seen as bullish signal, as cloud is still acting as support.
Fresh strength was also boosted by weakness of the pound that is probing below key supports and threatening of further easing.
The upside extension cracked daily Tenkan-sen barrier (7252) that further improves near-term picture.
Near-term studies are in bullish/neutral mode while dailies give mixed signals but expected to remain bullishly aligned while the price is holding above the cloud.
We look for close above daily cloud for firmer bullish signals.
Alternative scenario requires return into daily cloud to generate negative signal and re-focus recent lows at 7195/79.
Res: 7259, 7269, 7281, 7287
Sup: 7252, 7241, 7223, 7195
