FTSE 100 Ascent Paused by Bearish Order Block

Market Analysis – August 25

The FTSE 100 index has been on a consistent upward trend, gaining momentum after finding strong support at the 7917.0 demand level. This bullish push showcased the index’s strength as it climbed toward key resistance areas. However, the upward momentum was halted upon encountering a critical bearish order block at 8322.0, which acted as a formidable resistance level, temporarily stalling further progress.

FTSE 100 Key Levels

Demand Levels: 8110.0, 7917.0, 7730.0
Supply Levels: 8322.0, 8484.0, 9000.0

FTSE 100 Long-Term Trend: Bullish

The FTSE 100 index leveraged the liquidity resting above the relative equal highs at 8322.0. Following this, the formation of three black crows—a classic bearish reversal pattern—drove the price down to the 7917.0 demand level. This decline processed an unmitigated bullish order block (OB), which provided a fresh surge of upward momentum. The Stochastic indicator was notably in oversold territory during the test of this OB on August 5th. After testing this level, the index experienced a significant rally, resulting in eight consecutive days of bullish candles, with each day closing higher than the previous one.

Despite this strong recovery, the current pause in the price’s ascent is due to its encounter with the bearish order block at 8322.0, a level that had previously triggered the bearish displacement seen with the formation of the three black crows. This level now serves as a key decision point for traders. A break above it could signal further upside potential, while failure to break through may indicate a shift in market sentiment.

FTSE 100 Short-Term Trend: Bullish

A decisive push above the bearish order block around the 8400.0 level would confirm a shift in market structure, turning the focus toward higher resistance levels at 8484.0 and beyond. This could ignite further bullish momentum, making the swing high of 8484.0 a prime target for traders looking for forex signals.
Conversely, the formation of a double-top pattern on the 4-hour chart suggests that the index is facing strong resistance at this zone. If the price fails to break above the swing high, it could lead to a fresh bearish displacement, potentially targeting the lower demand levels at 8110.0 and 7917.0, where the next support may emerge.

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