Monday, June 23, 2014

UK Market Breaking Through Resistance

Since the first of the year, the UK economy has been the best performing of the group of 7 economies.  Growth is strong, inflation is falling and the BOE has even begun to hint it will raise interest rates sooner then anticipated. 

As the weekly UK chart shows, the latest price candle has moved through short-term resistance.  The underlying structure of the chart is still very bullish: all EMAs are moving higher, the shorter EMAs are above the longer EMAs, prices are above the EMAs and prices are using EMAs for technical support.  Also note the solid give and take between buyers and sellers for the during of this chart; advances are met with sell-offs, leading to a nice chart of generally higher lows and higher highs.

Prices moved more of less sideways for most of May, consolidating recent gains.  This allowed the MACD to drop, creating more technical room on this indicator for a price advance.  The MACD has also recently given a buy signal in conjunction with prices moving through short-term resistance.