Review and dynamics
After the announcement of the results of referendum, the index FTSE100 reached the annual highs at the level of 6440.0. After yesterday’s polls it was clear that majority of residents will vote for the exit from the EU.
British stock index FTSE100 dumped after the announcement of the results of the referendum. The index fell by over 11% to the level of 5770.0. Since the opening of trading session at London sto9ck exchange today, the index fell again by 1.4%, with the lowest level recorded at the level of 5725.0.
Yesterday, the price rose above the level 6415.0, which was a 100% recovery after the decline in the index since December 2015. The outcome of the referendum led to the decline in price below $5770.0
(Fibonacci 23.6% to the last wave of decline since the beginning of December 2015).
However, later at the European session, the price of the FTSE100 went up above the level of 5995.0 (Fibonacci 50%), and continued to go up 6090.0 (Fibonacci 61.8%). Today's volatility reached 720 points, between the highs of 6444 and the lows of 0 5724.0.
It is impossible to make short-term forecast until financial markets calm down. In the medium-term, the decline in the Pound and in the index FTSE100 will continue.
The decline may reach annual lows at the level of 5572.0 or go down.
A lot will depend on the actions of the Bank of England and measures taken by the UK government. It is likely that the Bank of England will soon lower the interest rate from the current 0.50 percent to the zero, which should support the British stock market.
On a weekly and monthly charts the indicators OsMA and Stochastic are in the negative territory; on the daily chart the indicators are also reversing towards the short positions.
On the daily chart a new channel has been formed with the lower limit at 5870.0 and the upper limit at 6270.0. The rise is limited by strong resistance levels 6160.0 (ЕМА50, ЕМА144), 6220.0 (ЕМА200 on the daily chart).
The pair is unlikely go above these levels.
In any case, pressure on the index FTSE100 at London exchange will continue in the near future.
Support levels: 5995.0, 5900.0, 5820.0, 5770.0 and 5725.0.
Resistance levels: 6090.0, 6160.0, 6200.0, 6220.0 and 6270.0.
Sell below the level of 6090.0. Stop-Loss: 6140.0. Take-Profit: 5995.0, 5900.0, 5820.0, 5770.0 and 5725.0.
Buy – not recommended.
At support level of 6090.0
Indicators suggest to open short positions