The so-called Footsie dropped below two bullish trend lines, and while the index remains below the second one (currently near 6,105 GBP), the outlook seems negative. Bears could be targeting June's lows near 5,950 GBP, and if this level is broken to the downside, a more significant correction to 5,660 GBP might occur.
Alternatively, if sentiment improves and the dip is bought, the index might rally toward 6,180 GBP, where the first intraday resistance might be located as previous lows are here.
Another resistance zone should be at the first uptrend line, currently near 6,360 GBP.
As COVID 19 cases continue to accelerate in the US, investors are anxious whether the currently priced-in V shape recovery will occur after all. However, central banks are still flooding liquidity into the markets, which should be bullish, but a correction might occur nevertheless if cases continue to rise.
