Current trend

The leading index of the London Stock Exchange FTSE 100 is demonstrating a downtrend at 8221.0, which is largely due to a new correction in the bond market.

The quotes were supported at the end of last week by the dynamics of the UK real estate market: one of the country's largest mortgage lenders, Halifax Bank Plc., reported a 0.3% increase in the house price index in July after an increase of 0.9% in the previous month, which contributed to the acceleration of the annual indicator by 4.3% from 2.4% and confirmed the recovery of the sector for two months in a row. It is also worth noting the correction of the mortgage rate to 7.83% from 8.03% previously, which in the future should increase demand for such loans.

Domestic bond market yields are driving the decline in FTSE 100 prices: the 10-year bond rate fell to 3.891% from 3.962%, the 20-year rate to 4.367% from 4.402%, and the 30-year rate to 4.435% from 4.503%.

The index's growth leaders are Severn Trent Plc. ( 1.50%), Smith & Nephew Plc. ( 1.40%), United Utilities Group Plc. ( 1.14%), Relx Plc. ( 0.95%).

The leaders of decline include Vistry Group Plc. (˗6.29%), Burberry Group Plc. (˗5.18%), Antofagasta Plc. (˗3.76%).

Support and resistance

On the D1 chart, the index quotes continue a local correction, approaching the support line of the descending channel with boundaries of 8400.0–8000.0.

Technical indicators are in the state of a new sell signal: the EMA oscillation range on the Alligator indicator begins to expand in the direction of decline, and the AO histogram forms new correction bars, descending into the sales zone.

Support levels: 8150.0, 8000.0.

Resistance levels: 8275.0, 8450.0.

Trading tips

In case of a reversal and continued decline of the index, as well as consolidation of the price below the support level of 8150.0, sell positions with a target of 8000.0 will be relevant. Stop-loss – 8220.0. Implementation period: 7 days and more.

In case of continued growth of the index, as well as consolidation of the price above the resistance level of 8275.0, buy positions with a target of 8450.0 and a stop-loss of 8230.0 may be opened.