FTSE 100: Bullish
The British stock index gained more than 1.5% on a weekly basis. Although the pace of growth was a bit slower compared to the United States stock indices, FTSE 100 printed several technical achievements. The daily chart below shows that the index had the highest daily close since August 2018. What's more, the recent peak on July 29 was breached the daily close price. Such a bullish performance opens the road too much higher value of the British stock index.
The technical sentiment is bullish as most of the indicators show the upward continuation. Williams alligator is in the eating mode and all of its lines are headed north. Macd trend indicator has both lines in the positive territory, while the histogram is crossing the level of 0. Related strength index is far above the 50% level but its value is still below the overbought threshold, which leaves the room for the balls to go further. There is also an interesting number verification the chart that reflects the pace of growth. The blue dashed line represents the median which divides the recent uptrend into two channels. Friday's price action who was the most illustrated in terms of breaking this resistance through. This table inconsistent growth index allowed the chart setting the sequence of Higher highs which is the main requirement for the uptrend to proceed.
When it comes to trading strategies, it is still reasonable to hold the index in Investment Portfolio as further bullish performance is expected. Those Traders who missed the opportunity to go long on FTSE 100 should expect a 1bounce back before entering the market. The nearest support is the green line of the Williams alligator, it is ascending the medium-term target is placed above 7800 points, the local peak chartered on August 2018.. and currently comes at 7624.1. Any Downside with salt on the daily challenge should be considered as an opportunity to open fresh long positions. Given the recent performance, the only question is how fast the boss will get there. Are there a potential break out of the target would lead to the uptrend acceleration.
Although the US dollar index is still in the long-term Downside channel, 2 days run allowed the technical analysts to assume that the resistance would be breached sooner rather than later. DXY added more than 0.44% on Thursday and Friday closing the day and the week at the highest level since December 2019. This action reminds a bullish replacement, however, is the same phase of growth was noticed in the week ahead, there might be a long-term bullish reversal the daily chart suggests that the index should overcome a local resistance at around 97.85 in order to proceed with the bullish rally.
Technical Indicators are mixed. The one hand and the simple moving average was a. Of 89 days is still above the current price. The resistance Curve comes at around the same level mentioned above, it is extremely important for the bulls to close any day above that resistance, otherwise, the beers would come back to control the market. The average directional index will the default period reflects the weak momentum because it's mainline is slightly above the threshold and heading south. Surplus of the indicator is negative but there are signs of the bullish recovery. Stochastic RSI oscillator is in overbought territory and its lines are about to cross each other to continue the local bull run. On the other hand, if the Bulls are keen on proceeding with the downtrend, a deep bearish replacement is needed to reload the oscillator. This is why I traded it should watch the middle line closely. If the index retraced to the threshold but remained above it, then brilliant buying opportunity would be on the table. Otherwise, the downside action would be more likely.
The most popular currency pair in the FX market failed to perform with the bullish recovery. There was an attempt to reverse the latest downside this past week as the pair were going north till Thursday afternoon. The resistance level of 1.1174 held the bulls as sellers stepped in with heavy-volume offers. As a result, EUR/USD reserved the price action and started declining sharply. On Thursday and Friday, the exchange rate lost 80 pics what's more the trading week closed with another consecutive low on the chart.
The technical sentiment is negative. Most of the indicators show that the bears could continue pushing on the rate, and the long-term downtrend could resume in the week ahead. Average true range point to a weak momentum and comparatively low volatility. Awesome oscillator dropped closer to the zero levels, which also doesn't add optimism for euro bulls. On the other hand, the blue ascending trend line on the chart represents the support line of the recent uptrend started in October 2019. So far, the pair is still about the support line which adds chances for the uptrend to renew. However, if the pair closed a day below 1.1070, then the bears might gain the momentum keep pushing on the exchange rate and move it lower. The main threshold is still at the horizontal level of 1.09 92 which was printed in November 2018. As long as the exchange rate remains above that level the upside attempts might be on the table.
An aggressive trading strategy suggests going long on EUR/USD in case of a failed test of the blue sending trendline. However, the stop-loss order has to be tight because the likelihood of the bearish action is still quite high. Going short on the pear is a bit late, and sellers should expect for a bullish bounce before entering the market in the same way the currency pair did in the past week. An attractive level to open fresh short positions is coming at 1.1130.
The British pound also declined versus the Greenback this past week, but the technical sentiment is much more optimistic compared to the euro. First of all, come on the daily chart below shows a clear support trend line which held various replacement 5 times recently. Second, the Bollinger bands indicator still supports sterling, while the range between upper and lower channels has been narrowed. Despite the failure of the bulls to hold gains above 1.31, the speed of the recent decline is not so obvious. GBP / USD managed to limit losses above the significant psychological round-figure level at 1.3000, which confirms that the long-term sentiment is still positive.
According to the technical analysis, accounts to test the lower band of the range are still possible. GBP / USD can have another try do decline to 1.29 in the upcoming week. However, that level might be attractive for long term investment in the currency pair. In this case, stop-loss orders have to be hidden below 1.28, so traders who cannot allow themselves having such a deep stop-loss should avoid entering the market. The long-term target is still at the same level as the pair showed in December 2018 which is 1.3518. Therefore, risking with 100 tips with a chance to gain more than 600 pips look attractive. The only question is how fast the bulls could renew the uptrend and lift the pair towards the upper channel.
The Australian dollar was one of the weakest currencies among majors this past week as AUD/USD dropped more than - 0.6%. The daily chart below has a sign of a possible head and shoulders to turn which might reverse the upside action. The horizontal support level comes at around 0.685 and only 23 pips left to get there. On the other hand, the bulls might use that level is an attractive entry point to renew long positions. The main concern was that the weakness of the Australian dollar was not related to some macroeconomics events, at to the general demand for the greenback across the board after the US-China trade deal.
This is why it is better to obtain the wait-and-see trading position and observe the price action before deciding to enter the market. The long-term analysis to a high likelihood of the option to continue however the bearish momentum is comparatively strong at this point, so further weakness might be expected. The buy-lows trading strategy would be profitable, but I have to wait for a strong signal on the daily time frame. Technical indicators show that the bearish momentum is getting exhausted and the bullish reversal might come. commodity channel index is the key indicator to watch for the trading signal. If the oversold threshold held, and the index reversed, then traders should consider going long AUD/USD. Otherwise, short deals would be more reasonable.