Technical analysis for 20th October 2026
Global markets are presenting a more cautious picture this morning following a significant reversal in European equities yesterday. The FTSE 100 and DAX both fell by more than 1% on Monday, while US technology shares staged a recovery. That divergence is important: concerns about European fiscal stability are now competing with uncertainty surrounding the profitability and financing of artificial intelligence.
Overnight, Asian equities have weakened again, oil remains elevated amid Middle Eastern tensions, and Gold is struggling to establish a sustained recovery ahead of next week's Federal Reserve meeting.
The FTSE 100 has undergone a significant change in its short-term technical picture overnight. The charts show the FTSE 100 DFB trading around 10,715, down approximately 0.11%, as I am writing this.
Yesterday, the FTSE was trading near 10,872, with daily RSI above 70 and the market looking increasingly overextended. Today, price has fallen sharply, the 30-minute chart has established a sequence of lower highs and lower lows, and the daily RSI has dropped to approximately 53.9.
My prediction is for an initial attempt to stabilise around 10,700-715, followed by a recovery towards 10,750-770. However, unless the FTSE reclaims 10,770, I favour selling rallies rather than buying the dip.
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