* FTSE 100 down 0.5 pct, ending 7-day winning run

* GKN (LSE: GKN.L – news) falls, traders cite GKN warning on currency movements

* FTSE currently in technically “overbought” territory

LONDON, Feb 25 (Reuters) – Britain’s top equity index fell on Tuesday, threatening to end a seven-day winning run, with engineering group GKN sliding after it warned about the impact from adverse currency movements.

The blue-chip FTSE 100 index, which had climbed 0.4 percent on Monday, retreated by 0.5 percent, or 31.75 points, to 6,834.11 points in early session trading.

GKN fell 3.5 percent, with trading volumes in the stock coming in at 54 percent of its average 90-day volume – above those for the FTSE where volumes only stood at 10 percent of the index’s average 90-day amount.

Although GKN posted a rise in annual profits and forecast continued growth this year, it unnerved some investors by warning that adverse currency movements could be a headwind for the company.

GKN shares have risen some 60 percent over the last year, but the warning about currency movements – with major international companies having to grapple with a slump in emerging markets currencies – led some traders to sell the stock to cash in on that rally.

“The warning about a possible hit from currency movements is impacting the stock,” said Central Markets trading analyst Joe Neighbour.

The FTSE, which rose 14.4 percent in 2013 to post its best annual gain since 2009, has risen 1.2 percent since the start of 2014.

The index is some 2 percent below its record high of 6,950.60 points, reached in late December 1999. Hantec Markets analyst Richard Perry expected the FTSE to soon hit a record level of 7,000 points but added the market may first have to consolidate for a period around its current levels.

The FTSE currently has a relative strength indicator (RSI) reading on a nine-day basis of around 80. If a market has an RSI above 70, it indicates it is technically “overbought” while under 30 shows it is technically “oversold”.

“There are a few exhaustion signals going on, and the RSI looks overbought. It doesn’t mean we won’t get to that all-time high, but we might just need a bit of consolidation first,” said Perry.