Technical analysis for 5th October 2026
The new week begins with a noticeably better backdrop for equities, primarily because Friday's weak US employment report has dramatically reduced the likelihood of another Federal Reserve rate increase this month.
September payrolls increased by only 29,000, versus expectations around 90,000, while previous months were revised lower and unemployment edged up to 4.2%. Markets now put the probability of an October Fed hike at below 20%, compared with roughly 70% only a week ago.
There are still significant risks. Long-term government yields remain exceptionally high, European fiscal concerns are growing and the Middle East remains volatile. But with Brent easing to around $101–102, the immediate inflation/rates picture has improved.
Initially today I am expecting a bull Monday as the 2h chart has gone bullish and has support from the Hull MA at 10452. A test of that level should hold as the bulls will look to recapture and hold the 10500 level. To start with a rise towards the 10520 resistance level looks likely, before a drop back, but may be only as far as the daily pivot at 10470 before the bulls reappear for a push up towards the key 10590 resistance area. We have both the key fib and daily level of note here so a short here is worth a go as we will likely see some profit taking here.
If the bears were to break belle the 10450 level today though then 10390 remains the next crucial support as it was on Friday, but the fact that the bulls bounced it just above this suggests that there is some decent buying pressure behind the scenes - helped by the daily RSI sitting around the 34 level currently (getting oversold but not massively so).
To be really optimistic, if the bulls were to break above 10600 then 10670 is the next level to keep an eye out for, being the top of the 10d Raff channel. Talking of Raff channels - both the10 & 20 day channels are heading down now given the recent weakness so the bulls will have to fight hard this month to change that.
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