Reversal alert!

The U.Okay. FTSE index is all the way down to the neckline of its head and shoulders sample.

Will we see a breakdown and selloff quickly?

FTSE Index (UK100) 1-hour Chart by TradingView

I’m seeing a fancy head and shoulders chart sample on the hourly timeframe of this U.Okay. inventory index, because the FTSE 100 continues to be transferring sideways.

The underside of its short-term vary occurs to be proper on the neckline of the reversal formation, so a breakdown under the 7,880.00 space may affirm {that a} bigger downtrend is underway.

Technical indicators are nonetheless pointing to the presence of bullish stress, although, because the transferring averages made an upward crossover whereas Stochastic is indicating oversold circumstances.

If the vary assist holds, one other bounce to the resistance at 7,960.00 may observe.

Then once more, market sentiment and fundamentals would possibly override these indicators since risk-off flows have been surging previously buying and selling periods.

This comes after Fed Chairperson Powell’s very hawkish remarks, which centered on the stronger probability of upper U.S. borrowing prices within the near-term.

In his testimony on the Semi-Annual Financial Coverage Report earlier than the Senate Banking Committee, the Fed head honcho mentioned “If the totality of the info have been to point that sooner tightening is warranted, we might be ready to extend the tempo of fee hikes.”

Not surprisingly, danger belongings akin to equities and commodities took main blows in anticipation of subdued enterprise and funding exercise down the road.

With that, international fairness indices may begin taking cues from top-tier U.S. information lined up all through the week, as these would probably add weight to the Fed’s tightening bias.

Higher hold tabs on Powell’s subsequent remarks, in addition to the NFP launch and main U.S. jobs indicators, to gauge if danger aversion may prolong its keep for the remainder of the week or longer!

This content material is strictly for informational functions solely and doesn’t represent as funding recommendation. Buying and selling any monetary market entails danger. Please learn our Danger Disclosure to ensure you perceive the dangers concerned.