The UK100 Index, on the H4 chart, was in an upward path from the 25th of March until 9th of April when a higher top was recorded at 7481.6. Supply pressure overwhelmed demand pressure and the upward momentum was disrupted.
A closer look revealed that the Momentum Oscillator displayed negative divergence between point a and b compared to the price at 7426.4 and 7474.6. This could have alerted technical traders to a possible direction reversal that might be starting in the UK100.
After the high at 7481.6, the price subsequently broke through the 15 and 34 Simple Moving Averages with the Momentum Oscillator breaking the zero baseline, both further confirming the possible technical reversal in progress.
A possible critical support level formed when a low was recorded at 7390.6 on the 11th of April. Buyers tried to push the market higher but supply overcoming demand with a beautiful Shooting Star Candle forming at the turning point at 7451.1 on the same day. The possible reversal was strengthened even more by the crossing of the 15 and 34 Simple Moving Averages, called a Death Cross soon after.
If the UK100 Index breaks through the critical support level at 7390.6, then three possible price targets may be projected from there. Attaching the Fibonacci tool to the bottom of the possible reversal at 7390.6 and dragging it to the top of the pullback at 7451.1, the following targets may be calculated. The first target can be anticipated at 7353.2 (161 %). The second price target can be predicted at 7292.7 (261.8%) and the third and final target may be expected at 7194.7 (423.6%).
If the top at 7451.1 is broken, the possible scenario is invalidated and will need to be re-evaluated.
As long as sellers maintain a negative sentiment and supply overcomes demand, the outlook for the UK100 on the H4 time-frame will remain bearish.
A closer look revealed that the Momentum Oscillator displayed negative divergence between point a and b compared to the price at 7426.4 and 7474.6. This could have alerted technical traders to a possible direction reversal that might be starting in the UK100.
After the high at 7481.6, the price subsequently broke through the 15 and 34 Simple Moving Averages with the Momentum Oscillator breaking the zero baseline, both further confirming the possible technical reversal in progress.
A possible critical support level formed when a low was recorded at 7390.6 on the 11th of April. Buyers tried to push the market higher but supply overcoming demand with a beautiful Shooting Star Candle forming at the turning point at 7451.1 on the same day. The possible reversal was strengthened even more by the crossing of the 15 and 34 Simple Moving Averages, called a Death Cross soon after.
If the UK100 Index breaks through the critical support level at 7390.6, then three possible price targets may be projected from there. Attaching the Fibonacci tool to the bottom of the possible reversal at 7390.6 and dragging it to the top of the pullback at 7451.1, the following targets may be calculated. The first target can be anticipated at 7353.2 (161 %). The second price target can be predicted at 7292.7 (261.8%) and the third and final target may be expected at 7194.7 (423.6%).
If the top at 7451.1 is broken, the possible scenario is invalidated and will need to be re-evaluated.
As long as sellers maintain a negative sentiment and supply overcomes demand, the outlook for the UK100 on the H4 time-frame will remain bearish.