Technical analysis

19 October 2018
  • 18:19

    FTSE Forming Reversed Head and Shoulders Pattern

    FTSE Forming Reversed Head and Shoulders Pattern 19.10.2018



    The FTSE100 index strengthened slightly on Friday. It was 0.25 per cent higher during the London session and it traded near 7,045 GBP. Thursday's massive sell-off failed to hit the Footsie and it lost only 0.40 per cent, compared to nearly 2 per cent losses of US stocks.

    The index seems to be forming the reversed head and shoulders pattern on the one- and two-hour charts, which is a reversal formation and might send the price higher over the next days. The formation is marked on the chart by the blue rectangles. To confirm this patter, the Footsie should jump above the neckline, which is currently located at around 7,080 GBP. If this happens, the index could rise by around 100 points - which is the potential of this formation - therefore the target for bulls could be near 7,190 GBP.

    On the downside, the first stronger support is at 7,025 GBP and then at 7,000 GBP. If the price breaks below these zones, the mentioned head and shoulders formation would be cancelled, and the bearish trend might be renewed.

    Disclaimer:

    Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or an investment advice by TeleTrade. Indiscriminate reliance on illustrative or informational materials may lead to losses

  • 16:53

    NZDJPY Tests Bearish Trend Line Again

    NZDJPY Tests Bearish Trend Line Again 19.10.2018


    The NZDJPY cross rose sharply on Friday and was 0.65 per cent stronger during the London session, as it was trading slightly below the 74 handle and testing the long-term bearish trend line yet again.

    Thursday's risk-off session ended quickly, and sentiment became positive once more, which might be considered evident from rising JPY pairs and stocks. It seems as if the NZDJPY cross is now facing a large resistance - July lows combined with the strong bearish trend line, which are located at around 74.00/74.10. The price jumped beyond this trend line in September, but it was only a false breakout and the cross returned back below this downtrend line quickly. Therefore, bulls may have another chance to prove that the latest sell-off is ending and the price can move higher.

    If the 74.10 area is taken out, further rise toward the 100-day moving average could occur. This resistance is located at 74.75 and the next target for bulls might be at the previous swing highs at 75.50.

    On the downside, the support could be seen at Thursday's lows near 73.35 and if broken, further reduction towards the 73 level might occur.

    As long as the cross remains below the downtrend line, the outlook seems bearish, however, there is a triple bottom pattern forming on the daily chart, which is a bullish reversal formation. It will be interesting to see how the situation regarding the NZDJPY cross will evolve.

    Disclaimer:

    Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or an investment advice by TeleTrade. Indiscriminate reliance on illustrative or informational materials may lead to losses

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