Greater London, England -- (SBWIRE) -- 09/23/2010 -- Sandy Jadeja, Technical Analyst at spread betting and CFD trading provider City Index (http://www.cityindex.co.uk) comments on financial market activity for the week beginning 20th September:
Now that the indices have reached the expected price objectives the possibility of a reversal could be at hand. With momentum indicators turning on cue, the odds suggest that if we start seeing a move lower at the start of the week then it is likely that a pullback to initial support levels could be about to start. However last week’s highs must remain intact if the bears are going to take the markets lower. Meanwhile Gold continues to rally with strong momentum and higher prices are likely.
FTSE 100 at intermediate resistance…
Finally reaching the 5610 price target the FTSE 100 had immediately rejected this level and provided a “Key reversal.” Also creating and “Outside bar” price pattern with a turn lower on the momentum index the index may now be heading lower towards 5345. If the index does manage to reverse higher and break above the 5612 then the bearish outlook would be negated. Coincidently the 5345 level coincides with the 20 day Moving Average which could provide support for the bulls.
Dow Jones struggling at 10630 level…
Facing a struggle at the 10630 level the Dow Jones will need to hold strong and thrust higher to attack the 10719 level if higher prices are in store. Momentum has remained positive with no signs of a turn lower just yet. The 10520 pivot level needs to provide support which if violated could see the index turn lower and head towards 10295 in the near term. Similar to the UK FTSE 100 the Dow Jones may find support at its 20 Day moving average. The month of Sept to Oct is generally bearish for indices but so far the markets have held up well.
Gold on target for upside objectives...
Gold continues to rally upwards and the all important $1300 level is more than likely to be met with the possibility of $1330 as the next main objective. Momentum is still strong supporting higher prices. The Parabolic SAR indicator remains a distance from the December contract which if broken may suggest that a short term reversal for Gold could take place. The $1260 level must hold this week as a short term support level. A breach of support may take the contract to $1220. More importantly the longer term trend remains bullish.
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