FTSE 100 – Failure to hold above trend line could suggest correction
Monday’s fake breakout above 7055 levels on hourly chart followed by a sell-off and a daily close below 7000 levels if followed by a failure/rejection at rising trend line level could result in a sell-off towards 6900 and potentially to 6800 levels over the next few days.
On the other side, only a daily close above 7055 would open doors for a rally to record highs above 7100 levels
GBP/USD – Back-to-back inside candles on weekly chart
Buyers are just refusing to step in even though the sell-off in the GBP/USD pair appears to have stalled. Dips below 1.22 are being bought into but the demand isn’t seen above 1.23 levels, thus gains have been limited.
Overall, the price action is sure to raise caution, however, the weekly chart still suggests the potential for a corrective move exits.
On the weekly chart, we see back-to-back inside candles. Inside candles at the bottom of the 2-year long downtrend suggests corrective rally ahead.
UK 10-yr Gilt – Weekly 5-MA could be put to test
Gilt’s daily close above 127.23 (23.6% Fibo retracement) on Monday if followed by a move back above resistance at 127.63 could yield a rally to weekly 5-MA level of 128.03 – 128.22 (38.2% Fibo).
On the lower side, failure to hold above 127.23 followed by a break below 126.42 (Oct 20 low) would open doors for a re-test of 125.63 (Oct 17 low).