London, England -- (SBWIRE) -- 05/10/2011 -- Sandy Jadeja, Chief Technical Analyst of spread betting provider City Index (http://www.cityindex.co.uk/) takes a look at the activity shaping the spread betting markets on 3rd May 2011.
With the US markets in rally mode the UK FTSE 100 has not progressed any higher over the last few weeks. It feels as if there needs to be some sort of catalyst to help the index breakout from its current range. Recent news events have inspired US markets but not the UK. Meanwhile Gold prices have edged higher and are close to the next price target before attempting to reach the key $2000 level. Overall various commodity prices have reached intermediate term key price resistance levels but in a bull market price barriers can prove to be meaningless until a change in trend and momentum occurs. Gold clearly has not seen this just yet.
FTSE 100 fails to inspire the Bulls
The FTSE 100 really has not provided any inspiration for the bulls lately. Although the index has had a nice rally from the 5594 low it does seem as if the index is lacking strength to see the 6117 target being reached. The recent extended holidays created lighter volumes and many traders have clearly waited on the sidelines for further clues to the next move. If we do see a continuation higher, then the 6000 level needs to be maintained. A break below this area may suggest a correction towards 5850 is likely. The range remains between 6000 – 6117 until a breakout has occurred.
Dow Jones clears 12545 level
The US Dow Jones has cleared several resistance barriers so far setting the stage to tackle the 13,000 level. As long as the index can hold above 12670 then it is possible for the next target of 13270 to come into sight. Technical studies also show a clean break above a downward trend line helping the index to gain strength and creating a classic higher highs and higher lows formation. The old adage of “Sell in May and go away” may prove to be a non effect until we see key price reversal formations in the coming weeks.
Gold continues to trade higher
Yet again the price of Gold has maintained a firm grip on a rising trend. The metal has not seen any corrections since the start of this year and although some technical indicators suggest an overbought reading there are no signs of any tops just yet. Currently there is a technical resistance level at $1581 - $1603 which needs to be overcome to tackle the $2000 level. Support is now at $1520 which if broken could see the commodity trade back lower for further support at $1447.
See how you can trade CFDs with City Index at http://www.cityindex.co.uk/cfd-trading/
About City Index
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, CFD trading and, in the UK, financial spread betting.
We constantly look to widen the range of assets we offer, improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer service and support. Visit http://www.cityindex.co.uk/ for more information.