FTSE 100 Technical Analysis

Over the past week, another double-digit inflation print and the resignation of UK Prime Minister Liz Truss rattled GBP/USD as the pair continued to move lower. With surging US yields supporting the safe-haven Dollar, the British Pound found temporary relief after Truss’ announcement before moving lower.

Despite waning sentiment and increased uncertainty in the United Kingdom that has weighed heavily on the British Pound, the FTSE 100 has managed to end the week in the green.

As price action continues to threaten the 200-week MA (moving average) at around 6948, a hold above the 7000 psychological level is required before the recovery can proceed.

With the October high currently holding at 7088.17, failure to gain traction above 7000 could place additional pressure on the short-term move.

UK FTSE 100 Daily Chart

(Click on image to enlarge)

Chart prepared by Tammy Da Costa using TradingView

Taking a closer look at the four-hour chart and a few key zones remain on the cards. While the resistance levels discussed above may limit the upside move, a rejection of 7000 and a break of the 6800 – 6830 range could fuel another bearish move.

UK FTSE 100 Four-hour Chart

(Click on image to enlarge)

Chart prepared by Tammy Da Costa using TradingView

As major UK firms release their Q3 earnings, next week’s agenda could assist in providing a fresh catalyst for price action. If the major heavyweights report optimistic Q3 results, it may be possible for the recovery to progress. However, if company earnings come in lower than expected, additional selling pressure may open the door for bearish continuation towards 6622.

Earnings Calendar

Source: IG

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