Technical analysis: July 8, 2024 - Footsie
08 July 2024
Paul Reid
Financial Journalist at Exness
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UK Elections are over and global economists are waiting to hear about the significant economic changes planned by the new finance minister, Rachel Reeves, who is outlining a comprehensive plan to stimulate growth this week.
However, recent announcements sound a lot like ‘more of the same’ and economists are not seeing policy shifts with weight. In her debut speech, Reeves confirmed that she would not alter the Bank of England's interest payment policy and is committed to a spending assessment in the coming weeks. Market sentiment was aggressive but mixed after those announcements and uncertainty continues to plague GBP-related assets. No trend has formed for the Footsie as yet.
Is the UK economy in a coma, or should we expect the Brits to rise from the ashes this quarter?
Footsie on the charts
The recent break below the rising trend channel and key support level suggests Footsie weakness. RSI remains neutral indicating room for the index to move in either direction. Short-term MAs are mostly bearish, aligning with the recent price movement, while long-term MAs are flat, offering no clear direction. Wide Bollinger Bands suggest high volatility. A very conflicting chart to say the least.
Key Indicators
Moving Averages
Consider the 50-day and 200-day moving averages. Crossovers can signal trend changes.
Relative Strength Index (RSI)
RSI above 70 indicates overbought conditions, while below 30 suggests oversold conditions.
Look for RSI divergences with price movements.
Volume Analysis
High volume during price changes indicates strong conviction.
Support and Resistance Levels
Identify historical levels for entry and exit points.
Candlestick Patterns
Learn common patterns (doji, hammer, engulfing) for potential reversals.
Index Value
Current Value: The FTSE 100 stands at 8,249.53.
52-Week Range: Over the past year, it has fluctuated between 7,256.94 and 8,445.80.
Price Movements
Net Variation: On this day, the index gained +78.41 points.
High/Low: The highest point reached today is 8,253.60, while the lowest is 8,170.97.
Conclusion
Looking ahead, the UK’s economic future appears promising under the proactive measures introduced by Finance Minister Rachel Reeves. Her commitment to unblocking infrastructure projects and revitalizing the housing market is set to drive significant growth. As difficult decisions are made to bolster the economy, traders can remain optimistic about the long-term opportunities these changes will bring. With strategic financial planning and a clear focus on sustainable growth, the UK is poised to strengthen its economic position, creating a robust environment for investment and development.
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