Technical analysis for 21st October 2026
Global markets are showing signs of stabilisation this morning following a difficult period for technology shares and European equities.
Strong US corporate earnings are helping restore investor confidence, with Asian markets recovering overnight. However, oil prices are climbing again amid renewed Middle Eastern supply concerns, and Gold remains under pressure as investors reassess the outlook for US interest rates.
The most encouraging development is that investors are beginning to distinguish between companies delivering strong profits and those relying heavily on future AI-related growth. That could support a more sustainable equity recovery, although elevated energy prices and borrowing costs remain significant obstacles.
The FTSE 100 is showing signs of stabilisation this morning following Monday's sharp sell-off. This is helped by the hold of the 25ema on the daily at 10685 yesterday - the fact that it didn't overshoot this level to test the 10660 lower support is a positive sign for the bulls, despite the recent correction. The daily RSI has recovered slightly to 56.5, while the 30-minute chart is showing a developing base around 10720–735.
My prediction today is for a cautiously bullish recovery towards 10795, provided the FTSE holds above 10724-734.However, the market still needs to break through resistance before I would become strongly bullish again. I'd want to see price pull back towards 10730, produce a bullish 30-minute candle and successfully reclaim or hold the daily pivot.
If price breaks below 10724 and fails to recover, I wouldn't continue buying the decline.
I favour buying a confirmed pullback rather than chasing price higher.
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