The chart for the British FTSE 100 index (UK 100 on FXOpen) illustrates:

→ Indicated by the red arrow: Yesterday, the index fell below the 8100 level for the first time since early August, driven by bearish sentiment in the U.S. stock market following reports from Microsoft (MSFT) and Meta Platforms (META), as we noted previously.

→ Indicated by the blue arrow: Today, the FTSE 100 is rebounding on the back of local economic data releases, including UK housing prices, which, according to Trading Economics, grew less than expected.

Technical analysis of the FTSE 100 (UK 100 on FXOpen) suggests that the UK stock market may be entering a downtrend, as:

→ It’s plausible that the market has been in a period of consolidation since September, forming a narrowing triangle pattern between the Support and Resistance lines.

→ An attempted bullish breakout of the Resistance line in late October failed to trigger an uptrend, while the bearish breach of the Support line appears more substantial.

→ The arrows indicate that today’s uptick may simply be a bounce from the lower boundary of a descending channel.

What’s next?

Given the correlation with the U.S. stock market, traders will likely focus on today’s key U.S. employment report due at 15:30 GMT+3, which could provide critical signals on interest rate prospects ahead of next week’s Fed meeting.

As long as the FTSE 100 index price (UK 100 on FXOpen) remains below the 8220 breakout level for the Support line, it appears the bears retain greater control.

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