Technical analysis for 5th November 2026
Global financial markets are enjoying a significant improvement in sentiment following the decisive Democratic victory in the US midterm elections, which has removed a major source of political uncertainty and raised expectations of reduced tensions in the Middle East.
The biggest development is the collapse in oil prices. Brent crude has fallen below $100 per barrel, losing approximately 20% this week, as investors anticipate that the new political balance in Washington could reduce the likelihood of further US military escalation against Iran.
The resulting decline in inflation expectations has supported government bonds, weakened the US dollar and encouraged renewed buying across global equities.
Gold has also rallied strongly, recovering above $4,000 per ounce as Treasury yields fall.
For UK investors, today's most important event is the Bank of England interest-rate decision at 12:00 GMT, with markets expecting an increase from 3.75% to 4.00%.
The overall picture is considerably more positive than yesterday, although concerns about artificial intelligence investment and the economic consequences of higher borrowing costs remain. The technical picture has also changed dramatically since yesterday. The FTSE has staged an exceptionally strong recovery, breaking above its short-term moving averages and establishing a sequence of higher highs and higher lows.
The daily RSI has recovered to approximately 64.5, indicating strong positive momentum without yet reaching the traditional overbought threshold of 70.
My prediction today is for a bullish session, with an initial test of 11000 - 11032 and the potential for a move towards 11167 if momentum continues.
However, after such a substantial rally, I would favour buying a confirmed pullback rather than chasing the market higher at its current level. The key battleground today is 10875 - 10900 support versus 10990 (July high) - 11032 resistance. A sustained move above 11032 would strengthen the bullish case. A break below 10875 would suggest the recovery is losing momentum.
If price breaks below 10875 and fails to recover, I would abandon this immediate bullish setup.
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