Technical analysis for 17th July 2026
We head into the final trading session of the week with sentiment becoming noticeably more cautious. The dominant story overnight has been another sharp sell-off in semiconductor stocks, particularly across Asia, where concerns are growing that AI-related investment may have become stretched after the incredible rally over the past year. At the same time, tensions in the Middle East continue to keep oil prices elevated, with Brent crude on course for its strongest weekly gain since April.
That combination has created a difficult backdrop for equity markets. Higher oil prices continue to raise inflation concerns, while weakness in technology is removing one of the biggest drivers behind the recent rally in US equities.
Risk sentiment has deteriorated noticeably compared with yesterday. The DAX and Nasdaq have both broken lower, the S&P 500 is testing key trend support, the FTSE has slipped back into its recent range, and Gold remains in a well-defined downtrend.
FTSE 100 Analysis
The FTSE continues to hold up better than many of its global counterparts. The reason hasn't really changed all week. Higher oil prices continue to support the heavyweight energy names, and that has helped offset some of the weakness elsewhere in the market. That doesn't mean the FTSE is immune to a broader risk-off move, but it does mean buyers have generally been quicker to step back in than we've seen elsewhere.
- What I'm Watching
- Whether yesterday's support continues to hold.
- Any early weakness being bought rather than accelerating lower.
- Continued strength in Shell and BP if crude oil remains elevated.
- Trading Plan
- I still prefer buying controlled pullbacks rather than chasing strength.
- If buyers defend support early in the session, I think another attempt towards this week's highs remains possible.
- However, if support gives way and the market starts producing lower highs, I would become much more defensive.
DAX 40 Analysis
The DAX remains the weaker of the European indices. Higher energy prices continue to weigh on sentiment towards German industry, while the weakness in global technology stocks is adding another headwind. Structurally the longer-term trend remains positive, but short-term momentum has clearly faded.
- What I'm Watching
- Whether overnight losses are recovered.
- Any failure rally into resistance.
- Whether buyers can defend the recent higher-low structure.
- Trading Plan
- My preferred trade remains selling failed rallies until buyers prove they have regained control.
- If the DAX can reclaim yesterday's highs then I'd reassess the bearish intraday bias, but until then I think rallies are likely to attract sellers.
S&P 500 Analysis
The broader uptrend remains intact, but the internal picture is becoming much more mixed. Technology continues to dominate sentiment, and overnight futures have come under pressure following another sharp decline in semiconductor shares amid concerns over AI investment and valuations. That doesn't necessarily mean the S&P is about to roll over, but it does suggest the easy part of the rally may be behind us for now.
- What I'm Watching
- Whether futures can defend yesterday's support.
- The reaction of semiconductor stocks after the US open.
- Any improvement in market breadth beyond the mega-cap names.
- Trading Plan
- I still favour buying retracements, but only after confirmation.
- If buyers continue defending support, I think another move towards the highs remains achievable.
- If technology weakness spreads into the broader market, I would rather wait than force long positions.
Gold Analysis
Gold remains the most surprising market. Despite escalating geopolitical tensions, bullion is heading for its biggest weekly decline in six weeks as traders focus instead on rising oil prices, stronger bond yields and the increased likelihood of further Federal Reserve tightening later this year. That tells me inflation concerns are currently outweighing the traditional safe-haven trade.
- What I'm Watching
- Whether Gold can defend the $4,000 area.
- Any recovery into resistance.
- The behaviour of US Treasury yields throughout the session.
- Trading Plan
- My preference remains to sell rallies.
- I would rather wait for a recovery into resistance than chase weakness after such a large weekly decline.
- If buyers can reclaim resistance and hold above it, then I'd reassess the bearish outlook, but at the moment sellers still appear to have control.
Final Thoughts
Today's market is being driven by two themes. The first is the continued rise in oil prices as geopolitical tensions remain elevated. The second is growing concern that the AI-driven technology rally may be entering a period of consolidation after an exceptional run. That doesn't mean the broader bull market is over, but it does suggest traders should become more selective.
The FTSE continues to benefit from its exposure to the energy sector and remains the most resilient of the European indices. The DAX looks more vulnerable while energy costs remain elevated. The S&P 500 still has a constructive longer-term outlook, but technology leadership is beginning to narrow, making stock selection increasingly important. Gold remains the clearest bearish chart. The fact that it continues to struggle despite geopolitical uncertainty tells us that higher yields and inflation expectations remain the dominant drivers.
Good luck today and have a great weekend.
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