FTSE: Downside risks persist

FXStreet (Córdoba) - The FTSE 100 surged 101 points or 1.77% to end Thursday at 5,773.79, favored by prospects of more stimulus in the euro area insinuated by ECB head, Mario Draghi, while a recovery in oil prices also helped, with commodity shares leading the way higher for a change.

Glencore surged 15.5%, while BHP Billiton added 10.6%. Also on the rise was Royal Mail, up by 4.1% after it announced results by the end of 2015 were in line with expectations.

FTSE technical perspective

“The technical picture shows that the bearish momentum has eased, as in the daily chart the technical indicators are aiming higher from oversold readings. Nevertheless the risk remains towards the downside as the benchmark remains far below bearish moving averages, while consolidating at multi-month lows”, said Valeria Bednarik, chief analyst at FXStreet. “In the shorter term, the 4 hours chart, the index is hovering around a strongly bearish 20 SMA, while the technical indicators recovered from oversold levels, but turned flat below their mid-lines, limiting chances of a stronger rally at the time being”.

Support levels: 5,714 5,650 5,606 Resistance levels: 5,822 5,886 5,940