XM does not provide services to residents of the United States of America.

Technical Analysis – UK 100 cash index enters challenging area



In line with the other main stock markets, the UK 100 cash index is continuing its recovery from the mid-March banking sector-induced dip. The index touched 7,205 on March 20 and it is now hovering just above the June 2, 2017 high of 7,599. It has entered a range that proved difficult for the bulls to overcome during 2022. The market has excellent memory regarding recent highs and hence UK 100 bulls should prepare for this new battle.

In the meantime, a common theme appears to be arising from the momentum indicators, potentially supporting the bulls' ambitions. The RSI is a tad below the 50-threshold, leaving the door open for another rally. In addition, the stochastic oscillator has managed to remain above its moving average, and it is now staging a bounce higher. This reaction is usually seen as an indication of bullish momentum in the market. The bulls, however, cannot take much encouragement from the Average Directional Movement Index (ADX) as this is dropping aggressively, signaling a weakening trending market.

The bulls would love a break above the 7,689 level set by the January 17, 2020 high, but they have to deal with the 100-day simple moving average (SMA) first. Even higher, the 23.6% Fibonacci retracement of the October 13, 2022 – February 16, 2023 uptrend and the 50-day SMA at the 7,729-7,773 range might trouble them.

On the other hand, should the bears manage to take over the market, they would aim for a retest of the 38.2% Fibonacci retracement at 7,533. The path then becomes trickier as the two heavyweights, the 50% Fibonacci retracement and the 200-day SMA are likely to prove stronger resistance points than currently envisaged by the bears.

To sum up, the UK 100 cash index has quickly recovered from the mid-March shock. But the 7,599-7,689 area would be the true test of the bulls' resolve.

Latest News

Technical Analysis – GER 40 index marks highs after highs

G

G

Technical Analysis – NZDUSD returns to bearish trend

N

Technical Analysis – Are USDJPY bulls ready for a new record high?

U

Technical Analysis – Will EURJPY re-test the 16-year high soon?

E

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.