The FTSE posted the sharpest decline amongst European indices as it traded 2.47% on Monday. The global sell off was sparked by China’s retaliatory measures against the US’s latest threat of additional tariffs. China decided to withdraw from purchasing agricultural products from the US and weakened its currency against the dollar to hurt US exporters. In terms of data, the UK services PMI figure came in above expectations. The FTSE should remain vulnerable to downside pressure as fears of escalating trade tensions between the US and China dominate global sentiment.
The FTSE lost 183 points to end at 7223 on Monday. The price traded below the 100-day MA AT 11380 and has yet to test the support near the 200-day MA at 7183. Should price break below this level, the next target support can be found at 7150 followed by 7100/7080. While the RSI reading is sitting in the oversold territory, strong bearish momentum may extend selling pressure on the FTSE. A sustained move above 7240 would be required to indicate buying pressure and increase chances of testing resistance at 7315.