The FTSE continues to hold onto trendline support for now, but it could break in the coming days.

Technicals

The FTSE continues to hold the long term trendline support for now. The index tested support and bounced over 100 points before falling back down to test it again today. A clear break of the trendline and the physiological number of 7,000 could spell a spiral of downward pressure. However, until this happens, buying on the dip could turn out a strong buying opportunity with limited upside. Interest rates will likely rise faster given this morning’s 9.1% CPI figure in the UK, and while this will hurt some shares, the banking sector will ultimately benefit from this. The cheaper pound will also help imports from abroad. This is likely one of the reasons why the FTSE is down just 10% from its all-time highs unlike many other index funds which are now in bear markets. (20% decline or more). Towards the upside, tough resistance sits at 7,193.