The UK 100 Index has had one of its worst weeks, with the selling in October pushing the price under the 7000.00 level. The weekly chart is showing that the 200 week moving average has stepped into the breach and halted a deeper correction, at least in the short term. The political situation in the UK is fractured with open calls for rebellion against the PM. Progress made on brexit seems to have stumbled into uncertainty. The risk off tone in global equities has also played a major part in knocking the index down. The H1 low at 6850.00 may provide the next support area. Below this level 6600.00 and the area immediate below it has been supportive during the second half of 2016. Earlier that year the index broke out higher and a reversal of this move may see 6000.00 tested. The low from 2016 is in place at 5547.00.
Resistance for the pair may develop around the September lows at 7225.00. A reversal of the selloff would need to clear this level and engage with the 100 WMA around 7355.00. Immediately above this indicator, the 7400.00 area has been a median level for the range in the recent months. The 7500.00 level and the 50 WMA at 7485.00 might become resistive on a push higher. Price has gotten into difficulty above this zone as it approached 7600.00 last year and also last month. Beyond 7600.00 the 7800.00 level is a confirmed resistance area having only been broken in May with a high at 7908.00.
The EURAUD chart is showing price is consolidating in higher time frames, with the one hour chart showing price action moving back lower into the bottom half of the consolidation. The price has just pasted sown under the point of control at 1.6226 and has found short term support at 1.6211. A breakdown of this area, points to a retest of the Friday low at 1.6178 and the 1.6180 level. Further losses could push price down to test the low of last week around 1.6147. Below this area the 1.6050 area has been supportive recently ahead of the 1.6000 round number.
Resistance at the falling trend line is being supported by the 100 and 200 HMAs around 1.6250. When the 50 HMA is added to this area, a zone of resistance is formed from 1.6245 up to 1.6264. A strong breakout higher through this zone could point to a test of 1.6280 and beyond to 1.6300. From there previous support and resistance at the 1.6320 area might impact price. The highs on the 1 hour chart can be seen at 1.6354 ahead of 1.6360. Above this area 1.6400 would be a potential target for a breakout of the consolidation.