The FTSE 100 has started the week on a lower note, down 0.42% after being weighed down by banking and mining stocks.
Commodity plays are setting the FTSE 100 back even as the UK economy reopens further this week, as mining and banking stocks fell this Monday. The fall in mining shares was led by Glencore and Anglo-American, which are both down 0.68% and 1.15% respectively. Both stocks had opened the market much lower, but have pared some of these losses.
The re-opening of non-essential stores, salons, and gyms provides renewed hope that the UK has turned a corner in the fight against the pandemic. This is what has allowed for an intraday bounce on the FTSE 100 after the market opened lower earlier in the session. The earnings season kicks off this week, with companies due to report their Q1 2021 results.
The daily chart shows the FTSE 100 maintaining the uptrend as a result of higher lows and higher highs. Today’s downside move on the index was rebuffed at the ascending trendline, which intersects the support at 6872.2. This shows that the correction of the last two days may be at an end.
Bulls would be looking to build on this bounce to transcend the 6963.9 resistance (highs of 7 January and 8 April) to establish a new 2021 high, targeting the 7062.0 barrier. This barrier represents pre-pandemic levels seen last on 26 February 2020. Above this level, 7232.7 forms an additional resistance.
On the other hand, a breakdown of the 6872.2 support and the ascending trendline, allows bears to aim for the 6800.2 psychological support, with 6739.0 and 6608.0 forming additional downside targets. 6477.0 and 6325.3 may also come into the picture if a price decline is more extensive.
