Hi Traders! UK100 technical analysis and short term forecast post is here. We do our analysis on the MetaTrader4 platform (MT4), some very interesting, useful tips and hacks about the MT4 platform could be found here. If you would like to learn more about the way we trade and the technical analysis we use then check out the Home Trader Club Spoiler alert – free memberships are available! In UK100 we are going to perform the top – down analysis in order to find possible trading opportunities. Let’s start our analysis now from the highest timeframe which will be the daily chart here.
UK100 D1(Daily) Chart Analysis – Strong Resistance Zone, Bearish Convergence, Bearish Hidden Divergence
On the daily chart, we have a strong resistance zone that has formed and the price which is moving higher reached this zone, respected it and bounced lower from this zone. Also, we have a bearish divergence that has formed between the first high that has formed at 7876.17 and the second high that has formed at 8045.17 based on the MACD indicator. The price then moved lower and broke below the last low at 7707.17 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider this as evidence of bearish pressure. As per the book scenario after a bearish convergence we may look for pullbacks and then further continuation lower. Currently, it looks like a pullback is happening and in addition to this, the price has created a bearish hidden divergence that has formed between the first high that has formed at 8045.17 and the second high that has formed at 7938.17 based on the MACD indicator which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears and we may now move down to one timeframe lower and look for evidences supporting this short term bearish view.
UK100 H4(4 Hours) Chart Analysis – Bearish Trend Pattern, Two Strong Resistance Zones
On the H4 chart, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, and lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then a further continuation lower. Currently, it looks like a correction is happening. Also, we had two strong support zones that have formed, the price moved lower broke below these zones and is holding below them, we may consider this as yet another evidence of bearish pressure. Currently, these strong support zones are acting as strong resistance zones for us. So the bottom line here is that the H4 chart has evidences supporting the bearish view. Until the two strong resistance zones (marked in red) shown in the image below hold my short-term view remains bearish here and I expect the price to move lower further after pullbacks.
Technical Analysis & Forecast Summary
UK100 D1(Daily) Chart Analysis
- Strong Resistance Zone, Bearish Convergence, Bearish Hidden Divergence
UK100 H4(4 Hours) Chart Analysis
- Bearish Trend Pattern, Two Strong Resistance Zones
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short-term sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
