Technical analysis for 16th October 2026
Global markets are ending the week on a more encouraging note after yesterday's turbulence in AI-related shares. The FTSE 100 has emerged as a clear relative outperformer, reaching a seven-week high, while US equities recovered from early weakness and Asian technology markets are rebounding this morning.
However, the underlying concerns have not disappeared. Investors are questioning the enormous borrowing requirements of the AI investment boom, while falling Treasury yields suggest money is moving into safer assets.
Oil also remains elevated, keeping inflation concerns alive despite recent efforts to increase global supply.
The FTSE 100 is showing further strength this morning, with the DFB trading around 10,831, up approximately 0.06% as I write this.
The technical picture has improved significantly since the beginning of October. The FTSE has recovered from below 10,500 to above 10,800, broken through the resistance levels that held it back earlier this week, and established a strong sequence of higher lows.
However, there is one important development today - the daily RSI has reached approximately 67.9, putting the FTSE close to overbought territory.
My expectation is for some early consolidation or a modest pullback, followed by another attempt to move higher, provided the market holds above the 10,790 pivot.
I remain bullish, but I'm becoming more selective about where to buy. We are also getting close to the key daily resistance level at 10908 - the bulls will be looking to close above this price for further upside, while prior to that the daily level at 10869 may garner an initial reaction on the first test.
If the bulls can push on towards the 10908 level we may well see a stall here, and with R1 also at the 10902 a stall around here could fit quite well, especially given we are heading into the weekend.
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