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FTSE 100 technical analysis: boosted by positive sentiment

By Nathan Batchelor

15:47, 7 October 2020

FTSE 100

The FTSE 100 is starting to challenge towards the psychological 6,000 level as positive market sentiment continues to lift global indices.

UK 100 analysis shows that the index could be preparing to test towards the 6,130 resistance level over the medium term. 

FTSE 100 medium-term price trend

The FTSE 100 is increasingly well-supported on price dips, placing the 6,000 resistance level back in focus.

FTSE 100 technical analysis shows that the index is trading in the middle of a falling price channel between the 5,730 and 6,130 levels. Typically, falling price channels are considered to be bullish reversal patterns. This increases the chances that the index may rally towards the top of the price channel.

FTSE 100 technical analysis

Technical analysis highlights the index’s 200-day moving average, around 6,300, as a potential upside target above the price channel.

According to the size of the falling price channel, the FTSE 100 could rally towards 6,500 over the medium-term.

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Gold

1,963.03 Price
-0.140% 1D Chg, %
Long position overnight fee -0.0185%
Short position overnight fee 0.0103%
Overnight fee time 21:00 (UTC)
Spread 0.30

Oil - Crude

70.95 Price
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Long position overnight fee -0.0153%
Short position overnight fee -0.0066%
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Spread 0.03

US100

14,475.40 Price
-0.190% 1D Chg, %
Long position overnight fee -0.0255%
Short position overnight fee 0.0032%
Overnight fee time 21:00 (UTC)
Spread 1.8

XRP/USD

0.53 Price
-0.430% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.00400

FTSE 100 short-term price trend

FTSE technical analysis over the short term shows that the index has a short-term bullish bias while the price trades above 5,950.

FTSE 100 technical analysis

The four-hour time frame is showing that a bullish breakout from a descending triangle pattern has taken place. Technical analysis shows that the bullish breakout remains valid while the price trades above 5,880.

According to the size of the descending price pattern, the FTSE 100 could rally towards 6,130 over the short term.

FTSE 100 technical summary

UK 100 analysis shows that the index is trapped inside a falling price channel and could soon test towards 6,130.

Markets in this article

UK100
UK 100
7614.6 USD
-3.3 -0.040%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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