We, at FxWirePro, expect similar to other global stock markets, UK's benchmark FTSE100 to remain in bearish territory, even after today's jump. However, we do acknowledge, FED chair, Janet Yellen's testimony in congress later today might spark further gains if Yellen's remark push back rate hike expectations and installs believe that FED is open to rate cuts if needed.
We will still remain bearish even in such a case, unless underlying current of risk aversion that has been fuelling the selloffs change course. FTSE100 is up little more than 1% today, trading at 5690 but the index is still down more than 8% YTD and more than 15% in last six months.
FTSE100 has been under greater pressure as its commodity exposure is much higher than other global peers at 13%.
Trade idea
We expect FTSE to shed another 400-500 odd points and reach 5150 area to form a bottom there. Key resistance for this call will be around 5950 area and final resistance will be 6150 area. Given the size of risks it would be better to sell FTSE100 as high as possible, somewhere around 5750-5800 area.
