Technical analysis for 31st July 2026
We head into the final trading session of July with sentiment looking noticeably stronger than it did just 48 hours ago. After Wednesday's uncertainty surrounding the Federal Reserve, attention shifted back to corporate earnings, and the market liked what it saw. Microsoft's exceptional cloud and AI performance has reinforced confidence in the long-term artificial intelligence story, while Amazon also delivered encouraging results that helped lift broader technology sentiment overnight.
That optimism has fed directly into Asian markets, where semiconductor shares staged an impressive rebound. The question now is whether that recovery can carry into Europe and the US, or whether higher bond yields will once again limit upside. Long-term Treasury yields remain close to their highest levels in years, while the Bank of Japan's decision to leave policy unchanged has weakened the yen further and reminded investors that monetary policy remains a key theme globally.
Friday's charts show a healthier tone across global equity markets. The FTSE 100 and DAX40 continue to lead with strong uptrends and remain the highest-conviction long opportunities. The S&P 500 has improved noticeably and now favours buying on pullbacks after reclaiming key short-term levels. The Nasdaq 100 is attempting a more meaningful recovery but still needs to overcome the falling channel and moving-average resistance before a sustained bullish trend can be confirmed. Gold remains range-bound, so patience is warranted until price breaks decisively above resistance or below support.
FTSE 100
- Bias: Bullish
- The FTSE remains one of the strongest equity indices despite a small pause yesterday.
- Technical picture
- Strong rising trend channel remains intact.
- Trading well above the 10 EMA and 25 EMA.
- RSI around 70, indicating strong momentum but also warning that short-term pullbacks are becoming more likely.
- Trend remains firmly higher until proven otherwise.
DAX 40
- Bias: Bullish
- The DAX continues to respect the rising trend channel and has pushed towards the upper half of that channel.
- Technical picture
- Strong sequence of higher highs and higher lows.
- Trading comfortably above the 10 EMA and 25 EMA.
- RSI around 66, showing strong momentum without being excessively overbought.
- Yesterday's candle confirms buyers remain in control.
- Only a daily close below the rising 10 EMA would weaken the trend.
S&P 500
- Bias: Bullish
- The S&P has produced another constructive bullish candle and is recovering back above the short-term averages.
- Technical picture
- Price reclaiming the 10 EMA.
- Recovery from channel support remains intact.
- SafeZone projection continues pointing higher.
- Buyers beginning to regain momentum.
Nasdaq 100
- Bias: Neutral to Bullish
- The Nasdaq has finally produced a stronger recovery candle and is testing the upper boundary of its falling channel.
- Technical picture
- Strong bullish candle after several weeks of weakness.
- Price testing the 10 EMA and descending trendline.
- Still below the 25 EMA and longer-term trend resistance.
- Confirmation is still needed before declaring a trend reversal.
- A close above the 25 EMA would turn the daily outlook decisively bullish.
Gold
- Bias: Neutral
- Gold remains trapped inside its wider consolidation despite another attempt to recover.
- Technical picture
- Trading around both moving averages.
- Mixed candle sequence.
- RSI around the mid-50s.
- No confirmed trend breakout.
FTSE 100 Analysis
The FTSE continues to impress as the combination of defensive sectors, financials and energy has helped the index outperform during periods of volatility, while improving global risk appetite should provide additional support today. Although oil has eased from its recent highs, prices remain elevated enough to support the major energy names without creating the same inflation fears we saw last week.
- What I'm Watching
- The key level remains yesterday's support.
- If buyers defend any early weakness and we continue producing higher lows, I think another move towards the recent highs remains the higher-probability outcome.
- Banks and energy stocks should continue providing leadership.
- Trading Plan
- I'm still looking to buy controlled pullbacks rather than chase an opening rally.
- As long as support holds, I favour the long side.
Final Thoughts
The market finishes July on a much firmer footing than many expected earlier this week. The Federal Reserve has introduced some uncertainty around the outlook for interest rates, and higher bond yields remain a challenge. However, earnings have once again reminded investors that companies delivering genuine growth continue to be rewarded. The recovery in semiconductor stocks overnight is particularly encouraging after the heavy selling seen earlier in the week. The FTSE continues to look one of the strongest European markets, helped by its balanced sector composition. The DAX has improved alongside technology, while the S&P 500 remains supported by high-quality earnings rather than broad speculative buying. Gold continues waiting for its next catalyst, with bond yields remaining the key driver.
Good luck and have a great weekend.
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