FTSE, Dow Jones Talking Points

FTSE Technical Analysis

UK FTSE 100 is trading at a crossroads after a three-week rally drove the major stock index into a wall of resistance at 7376. With a pullback from the current monthly high driving price action lower, a low bodied candle is forming on the daily chart highlighting indecision around the 7300 psychological level.

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While the FTSE recovery comes under pressure, bullish momentum could be losing steam. After falling to a low of 7244.83 earlier today, the rejection of the wick and the formation of a doji muted the downward move. With prices hovering around 7300, the 14.4% Fibonacci (’20 – ’22 move) is currently providing support at prior resistance around the 7285 mark.

As technical levels contribute to establishing the direction of the underlying trend, a break of 7285 and below the 7244 could bring the 7237 Fibonacci (14.4% Fib of the ’03 – ’18) back into play. If UK equities continue to face headwinds that weigh on risk-assets, a hold below 7187 could refuel bearish momentum.

UK 100 (FTSE) Daily Chart

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Chart prepared by Tammy Da Costa using TradingView

Dow Jones (DJIA) Technical Analysis

With US midterms currently underway, Dow Jones futures are on their way for its third consecutive day of gains as DJIA heads towards resistance at 33400. With risk-on sentiment driving S&P 500, NASDAQ and Dow higher, further gains and a hold above 33443 may allow prices to continue to rise.

Dow Jones Futures Daily Chart

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Chart prepared by Tammy Da Costa using TradingView

Change in Longs Shorts OI
Daily-13%9%2%
Weekly-15%9%1%

— Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707

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