FXTM

UK100 H4 – Bullish pressure might be building

OANDA:UK100GBP   UK 100
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The UK100 Index, on the H4 time-frame, had downward momentum until the 15th of August when a lower bottom was recorded at 7035.9. The bulls found the price attractive and demand overcame supply.

After the bottom at 7035.9 the market broke through the 15 and 34 Simple Moving Averages and the Momentum Oscillator broke the zero baseline into positive territory. This confirmed the possibility of a technical trend reversal.

A possible critical resistance level formed when a higher top was recorded on the 20th of August at 7240.6. Sellers tried to bring the price lower but bullish pressure overcomes bearish pressure and a support level formed later on the same day at 7101.5.

The possible reversal was strengthened further with the crossing of the 15 and 34 Simple Moving Averages, called a Golden Cross.

If the UK100 Index breaks through the critical resistance level at 7240.6, three possible price targets may be expected from there. Attaching the Fibonacci tool to the top of the possible reversal at 7240.6 and dragging it to the bottom of a possible support level at 7101.5, the following targets may be considered. The first target can be anticipated at 7326.6 (161 %). The second price target can be predicted at 7465.7 (261.8%) and the third and final target may be expected at 7690.8 (423.6%).

If the support level at 7101.5 is broken, the possible scenario is valueless and will need to be re-evaluated.

As long as buyers maintain a positive sentiment and demand overcomes supply, the outlook for the UK100 Index on the H4 time frame will remain bullish .

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