The FTSE 100 is under pressure below the 7,000 level as uncertainty towards the UK economy continues to plague sentiment towards UK stocks and the risk that could lay ahead.
Yesterday, the Bank of England announced a new form of QE in the shape of 20-year bonds in order to sure up the bond market from ongoing market stressed that could harm the system.
UK yields have fallen since the details were announced and GBP has strengthened, while UK stocks have staged only a mild recovery from the worst levels of the month so far.
The QE programme showed that up to GBP 5 billion per action initially, however, the parameters under review (sizes could be changed). And the first auction today between 1400-1430 GMT.
With this in mind keep an eye on the market pivot level, which is 7,000. This is basically the pivot point for the bulls and bear at the moment. The fact that UK stocks are not reacting much to the QE news is pretty bearish.
Sentiment has turned bullish again, which could suggest further price losses ahead for the UK100. I think the market is looking for a bearish breakout also down the road.
In an ideal world sentiment should be heading in the opposite direction of the trade. This is because retail traders are normally on the wrong side of the trade, and especially price trends.
Based on the current sentiment reading I think it is highly probable that we could see the downside starting to gain momentum. However, I still feel long-term bearish towards the UK economy.
UK100 Short-Term Technical Analysis
According to the four-hour time frame the UK100 has ignited notable head and shoulders pattern. I think we have already seen part the target reached, so a rebound of sorts does make sense.
The size of the pattern implies that we are about to see a move to downside of over 400 points if we start to break to the downside. I would suggest keeping a close watch on the 6,850 level.
See real-time quotes provided by our partner.
UK100 Medium-Term Technical Analysis
The daily time frame shows that a large wedge-shaped pattern has been broken. The UK100 has also moved back under its key 200-day moving average, meaning the trend is once again bearish.
If we see the UK100 staying below the 7,200 level, which is a key market pivot, I would suggest that we could easily start to see the UK100 trading towards the 6,500-price area.
See real-time quotes provided by our partner.
A comprehensive website for traders, both experienced and new! Checkout our content and learn how to invest and speculate in the markets using margin traded products. Our team of educators has extensive experience and is here to help. Enjoy!
© 2020 YouTrading UK - Leaders in Trader Training.
Cookie | Duration | Description |
---|---|---|
__cfduid | 1 month | The cookie is used by cdn services like CloudFare to identify individual clients behind a shared IP address and apply security settings on a per-client basis. It does not correspond to any user ID in the web application and does not store any personally identifiable information. |
_wpfuuid | 11 years | This cookie is used by the WPForms WordPress plugin. The cookie is used to allows the paid version of the plugin to connect entries by the same user and is used for some additional features like the Form Abandonment addon. |
cf_use_ob | This cookie is set by the provider Cloudflare content delivery network. This cookie is used for determining whether it should continue serving "Always Online" until the cookie expires. | |
cookielawinfo-checbox-analytics | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics". |
cookielawinfo-checbox-functional | 11 months | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". |
cookielawinfo-checbox-others | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. |
cookielawinfo-checkbox-advertisement | 1 year | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Advertisement". |
cookielawinfo-checkbox-necessary | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary". |
cookielawinfo-checkbox-performance | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance". |
viewed_cookie_policy | 11 months | The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data. |
Cookie | Duration | Description |
---|---|---|
YSC | session | This cookies is set by Youtube and is used to track the views of embedded videos. |
Cookie | Duration | Description |
---|---|---|
_ga | 2 years | This cookie is installed by Google Analytics. The cookie is used to calculate visitor, session, campaign data and keep track of site usage for the site's analytics report. The cookies store information anonymously and assign a randomly generated number to identify unique visitors. |
_gid | 1 day | This cookie is installed by Google Analytics. The cookie is used to store information of how visitors use a website and helps in creating an analytics report of how the website is doing. The data collected including the number visitors, the source where they have come from, and the pages visted in an anonymous form. |
Cookie | Duration | Description |
---|---|---|
_fbp | 3 months | This cookie is set by Facebook to deliver advertisement when they are on Facebook or a digital platform powered by Facebook advertising after visiting this website. |
fr | 3 months | The cookie is set by Facebook to show relevant advertisments to the users and measure and improve the advertisements. The cookie also tracks the behavior of the user across the web on sites that have Facebook pixel or Facebook social plugin. |
IDE | 1 year 24 days | Used by Google DoubleClick and stores information about how the user uses the website and any other advertisement before visiting the website. This is used to present users with ads that are relevant to them according to the user profile. |
test_cookie | 15 minutes | This cookie is set by doubleclick.net. The purpose of the cookie is to determine if the user's browser supports cookies. |
VISITOR_INFO1_LIVE | 5 months 27 days | This cookie is set by Youtube. Used to track the information of the embedded YouTube videos on a website. |
Cookie | Duration | Description |
---|---|---|
_gat_UA-42160853-2 | 1 minute | No description |
cf_ob_info | No description | |
CONSENT | 16 years 8 months 3 days 6 hours 2 minutes | No description |