The FTSE 100 has started to move sharply lower alongside other global equity markets once again, due to a story in the Financial Times, which had comments from Moderna’s Chief Executive Stéphane Bancel suggesting further hard time from the South African variant of the coronavirus, dubbed as Omicron.
The chief executive of Moderna predicted in the FT that existing vaccines will be much less effective at tackling Omicron than earlier strains of Covid-19. Bancel went further and also warned it would take months before pharmaceutical companies can manufacture new variant-specific jabs at scale.
So far, the FTSE100 has been able to pop back above the 7,000 level, although I don’t think it will be long before we see the FTSE100 dipping well under the psychological 7,000 level.
As market uncertainty comes back into fray it us still built on fear rather than facts. and The rapid spread of the variant in South Africa, suggested the current crop of vaccines may need to be modified next year, however, no evidence suggests the new variant is deadly than the Delta variant yet.
From a technical perspective, a move under the 7,000 level would make the FTSE100 look attractive in my opinion, and the FTSE100 is approaching the bottom of a huge rising price channel on the higher time frame.
As USA futures dip into negative territory we should see USA traders scrambling to cover longs from Monday, which now looks to be a short-lived upside correct. Overall, expect more price volatility this week for the FTSE100.
Sentiment towards the UK100 is also in favour of more losses as traders remain wholesale bullish. According to the ActivTrader platform some 84 percent of traders are bullish towards the UK100. This reading is unchanged since last week.
UK100 Short-Term Technical Analysis
The four-hour time frame shows that the FTSE100 ignited head and shoulders pattern after sellers were able to break through the 7,200 support level during the Asian session.
It should be noted that this pattern holds a massive 300 points of downside potential, which would take the FTSE100 towards the 6,900 support area. As mentioned above, this could be a solid buying opportunity around 6,900.
See real-time quotes provided by our partner.
UK100 Medium-Term Technical Analysis
The daily time frame shows that the UK100 remains trading inside a large rising price channel, with the price now close to the middle of the pattern at current trading levels.
A move towards the 6,900 level could be on the horizon medium-term if bears can hold the price below the 7,200 area during this latest decline. A trendline test could be a huge buying opportunity, with the top of the channel near to the 7,000 level.
See real-time quotes provided by our partner.
