FTSE Bullish Momentum Begins to Wane

FTSE 100 Market Analysis – May 23, 2024

The FTSE 100 experienced a successful breakout in early May, followed by a retest that propelled the price to 8400.0. However, the current small-sized candlestick formation is indicating a significant decline in bullish momentum. The market appears poised for a retracement to seek support.

FTSE 100 Key Levels:

Demand Levels: 8206.0, 8044.0, 7794.0
Supply Levels: 8400.0, 8500.0, 9000.0

Long-Term Trend: Bullish

Since January, the FTSE 100 has exhibited a parallel channel chart pattern on the daily chart. In mid-April, the price tested the lower boundary of this channel. The Stochastic indicator was oversold during this period, signaling a potential bullish reversal. This test led to a price explosion and subsequent breakout above the parallel channel. Following a retest, the price ascended to 8400.0, with bullish candles forming a steep slope.

Currently, the Stochastic indicator is in the overbought region, indicating an exhaustion of the upward movement. The alignment of small candles suggests a decline in bullish momentum.

Short-Term Trend: Bullish

On the 4-hour chart, the Moving Averages have caught up with the daily candles, indicating a price decrease. The price is expected to decline towards 8206.0 to find support before potentially continuing the uptrend.

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