Joshua Mahony, Market Analyst at IG, joined Tip TV in today’s Finance show, to share the outlook for FTSE 100, Dow Jones, GBP/USD and GBP/JPY.
FTSE 100: Double top
Mahony looks at the technical charts for the FTSE 100, noting that the index broke above a major point of resistance at 6300. The 4-hourly charts suggest that the index sees a potential double top formation and is reversing lower.
Mahony explains how the price action on the footsie is mostly related to oil and mining stocks, and with further downside potential in oil prices the outlook remains dim.
Dow Jones: The inter-relation with markets
Looking at the charts for the Dow Jones index, Mahony tells that it is the case of markets being inter-related, when one index hits a major resistance other indices are seen reversing. He further shares the example of the German index DAX, when DAX hit previous lows, all other indices bounced higher.
On the short-term price action for the DJIA, Mahony sees similar price action to the Footsie, a double top formation.
GBP/USD outlook remains positive
Mahony maintains a positive outlook on GBP/USD, noting that upside towards 1.55 levels remains likely. He further adds that the cross was previously seen reversing around the 1.56-1.57 levels. An early July support level is seen at 1.5330 level.
GBP/JPY: Heading higher
On the GBP/JPY, Mahony believes that the price action is showing the same bottoming out pattern as GBP/USD. The technical charts having displayed the reversing signs, another leg higher is expected.
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