• Welcome to forex.pm forex forum binary options trade. Please login or sign up.
 

UK100 – A big test above

Started by PocketOption, Mar 15, 2022, 07:55 pm

Previous topic - Next topic

0 Members and 1 Guest are viewing this topic.

PocketOption

UK100 - A big test above

FacebookTwitterEmail

Can it continue to push higher?


It’s been a highly volatile period in the markets, with equities coming under severe pressure as a result of high inflation, the n invasion of e, and the sanctions against it that followed.


The UK100 has shown more resilience than its European peers during that time, in part as a result of the UK having fewer trade ties – particularly oil and gas – and due to the weight of commodity stocks within the index. Soaring commodity prices are naturally beneficial for those companies, which has to an extent shielded them during the declines.


Of course, they haven’t been entirely immune, particularly those with direct exposure to . The weakness in the pound may have also helped given how much revenue from FTSE 100 companies is generated outside of the UK.



That said, the index has still fallen into correction territory during that time and below the 200/233-day SMA band. After seeing support around 6,800 we have seen a partial reversal of those losses, buoyed by talks between e and  which both sides suggest are making positive progress.


It is now running into resistance in a very interesting area on the chart. The 50% Fibonacci retracement – February highs to March lows – falls around the 200/233-day SMA band which is now being tested as resistance, having previously been support. A rejection of this level could be a very bearish signal while a break above here could be quite the opposite.


Ultimately, this is a very headline-driven market and volatility is expected to persist. If we do see a move above, 7,335-7,400 is the next big test, with the 61.8 fib, 55/89-day SMA band and prior resistance combining. A failure at the 50 fib could see attention shift back to 7,000 – a major psychological barrier, prior support and resistance, and roughly the mid-point of the recent lows and highs.


Source: UK100 - A big test above