The Footsie Index closed over 1% lower at 6701.59 following a plunge in oil prices in yesterday’s session. The continuous weakening of oil prices reinforced concerns over oversupply and global growth, directing attention to the effects of today’s US oil inventory report and the Fed’s monetary policy meeting. In addition, UK’s CPI and PPI reports shall further reflect the impact of domestic political challenges and how the decline in the commodity prices shall influence inflation and the energy sector in the Footsie.
The bearish trend on the Footsie remains valid as it continues to fall towards the lower Bollinger band and bouncing off the 10 period MA around 6735 on the 1H chart. Traders may expect a break for sellers around this month’s bottom at 6670. The RSI reading is well below the 50 mark and leaving room for price action to fall further lower.
Support: 6673 / 6616
Resistance: 6680/ 6650