Longer-term still looking promising
The charts were starting to look quite promising. We had a clear uptrend and price broke back above the 200/233 period simple moving average band on the 4-hour chart.
UK100 (FTSE 100) 4-Hour Chart
Then we ran into our first obstacle on the, the 55-day , which is when the profit taking kicked in. This took us back below the 55/89 band on the 4-hour chart where we’re now testing the 200/233 band.
So far, the 38.2 fib is holding within the first band but that doesn’t mean much yet. A break back through 5,800 would add some promise, especially if combined with a significant close above the 55/89band (4 hour chart). Obviously, that doesn’t necessarily been it’s correction over but it’s a major hurdle overcome.
UK100 (FTSE 100) Daily Chart
Given the initial FTSE ., failure of 55-SMA (daily) and immediate resistance around the 55/89 (4hour) band, I fear more pain may be in store for the
This still looks like more of a corrective move but maybe one that has a little more to run. The area around the 50 and 61.8 fibs may appeal more, should the 38.2 fib and 200/233 band fall.
The article was written by Craig Erlam, Senior Currency Analyst at OANDA
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
This article was originally posted on FX Empire
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