FTSE drops below a key support
13 March 2023
The London FTSE has been one of the strongest indices in the past few months, but today's decline is a reminder of the potential impact of the SVB turmoil on the UK-based index. Despite this, the overall situation is still far from terrible.
Currently, the FTSE is trading just below a key support level around 7660 points (orange). This level is the closest support and is likely to be broken. If that happens, the next key support level is the long-term uptrend line (black), which has been connecting higher lows since March 2020. While it could serve as a support, it is not guaranteed to do so.
If the FTSE falls below the black trendline, the next candidate for support is the green area on the 38.2% Fibonacci retracement level. This area was a key support in 2021 and 2022 and it looks like it must be respected regardless of anything.
As long as the FTSE remains below the orange area, sentiment is likely to remain negative. The potential targets are the black and green support levels. If the price were to rise back above the orange area, it would be a display of significant strength, but this scenario is currently less probable.