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 H4 chart here.
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UK100 H4(4 Hours) Chart Analysis – Bearish Convergence
On the H4 chart, currently, we have a strong bearish momentum with the price creating a bearish divergence that has formed between the first high that has formed at 8375.84 and the second high that has formed at 8413.48 based on the MACD indicator. The price then moved lower and broke below the last low at 8236.46 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 expect corrections and then further continuation lower. Currently it looks like a correction is happening. So everything looks good here for the bears and we may now move down to lower timeframe and look for evidences supporting this short term bearish view.
UK100 H1(1 Hour) Chart Analysis – Bearish Trend Pattern, Two Strong Resistance Zones
Looking at the H1 chart, we could see that 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 and in addition to this there are no signs opposing this short term bearish view at the moment. 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. Until these 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.
Technical Analysis & Forecast Summary
UK100 H4(4 Hours) Chart Analysis
- Bearish Convergence
UK100 H1(1 Hour) 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.
Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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