FTSE100 1W Chart Analysis, August 22, 2023
FTSE100 looking for a direction.
UK stocks fell for a week due to fears of a housing market slowdown. The highest interest rates in over 15 years worsen the situation.
The FTSE100 has been moving in a horizontal trend since April 2021. The movement is limited by the Fibo levels of 0.382 (6811) from below and the ATH of the index from above (8050). However, since ATH in Feb, we can observe a descending triangle pattern, which may mean a continuation of declines to around 6,800 (-6,2%). The pattern is limited with support on Fibo 0.236 and lower highs on an orange line.
On the other hand, touching the lower Bollinger Band has so far always heralded a return to the median or upper band. These events are marked with vertical blue lines and the most recent with red line. The return move can reach the orange downline or even the ATH near the top band. Also, the strength of the current support may be evidenced by combining the Fibo retracement with the EMA200 (green line). The future price movement should depend on the closing of the weekly candle.
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