Hugo
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Hugo in HTO Trading,

FTSE 100: Breaking the rising wedge

Since the beginning of the year the main UK index gained more than 2.0% however last week alone fell more than 1.5% and made a phase change, shifting from a bullish to a warning phase.

Last week the main UK index fell with a wide range and closed near the low of the week, in addition managed to close below the previous week low, which suggests a strong bearish momentum.

The stochastic crossed below the overbought zone and is showing a strong bearish momentum.

Expecting a downward move to a key level at 7,084.5 (scenario 1) on a break below the previous week low at 7,232.0 although a bounce from the key level at 7,084.5 could set in motion another push to the upside toward the previous key level at 7,287.5 (scenario 2).

However I suspect a deeper correction can be under way toward the weekly support at 6,810.5 due to the break of the upward rising wedge pattern (scenario 3).