FTSE 100: Further upside potential
The FTSE fell hard in early trading this morning after hitting the 5900 level and it is currently hovering around 5868. As bullish sentiment has built up towards the UK benchmark since May and traders are already pricing in more quantitative easing ahead of Thursday’s release of 3Q GDP, the early weakness could soon be reversed. As long as the market continues to hold onto the ground above the 61.8% Fib retracement at 5798, the market could reach the 2012 highs at 6000. With the RSI supported by a strong trend line, the technical setup is clearly favouring the bulls, which makes the current bull squeeze a good buying opportunity. Only a break below support at 5735 could delay the upward movement. The economic calendar is quite today with the BoC announcement and the US Richmond Fed Manufacturing Index among the most notable.
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