- FTSE 100 closed at 10,767 on 2 November.
- Resistance 10,890; support 10,730.
- BoE decision on Thursday is the catalyst.
InvestingCube chart · Yahoo Finance data
The FTSE 100 ended Monday at 10,767.22, up 0.35%, which isn’t bad given that oil dropped hard and energy stocks took a beating. Banks, defence names and the drugmakers made up the difference. If you’ve read our latest FTSE 100 technical analysis, you’ll know the index keeps running into the same wall. The chart shows exactly were.
Figure 1: FTSE 100 key-level map in navy and red, built from published closes and levels (illustrative, not a live feed).
What the Chart Shows
Beginning on the far left, the closing value was 10,764.69 on 19 October, fell to approximately 10,686 during trading hours on 28 October as HSBC and Reckitt disappointed investors, and then rose to 10,729.78 and eventually 10,767.22. This area (shaded) between 10,730 and 10,890 has contained all action. The red dashed line representing 10,890 represents the top of the price range that sellers have protected two times. Above that point is the weekly high of 10,990. Below are two more levels of support; 10,542 and 10,367.
In our support note we called 10,730 the level to guard. It has held, but only just.
Inflation and the Bank
Why would a rate hike on Threadneedle Street affect your index trade? According to the ONS, UK inflation reached 3.5% in September – its highest level since last October. A rate hike can improve bank margin, but also hurt borrowers. Sticky prices will continue to support gilt yields, which will negatively impact dividend shares (as we witnessed when)
yields sat near 3.1%. Income investors can now earn a decent return from gilts, and that puts a lid on rallies.
Banks, Oil and Europe
Traders already treat a November hike as settled, with about 96% priced in, so Thursday is really about what the Bank says next. Energy shares follow crude, miners follow copper and the banks follow rate bets. Europe isn’t helping. Our DAX analysis shows Germany’s index stuck under its own hurdle at 25,700.
A Practical Game Plan
Be patient. Both of the previous rejections of 10,890 were due to failed breakout attempts; therefore, do not chase spikes, but wait for a close on a daily basis. Place your stop-loss order immediately above/below the closest support/resistance level (e.g., if you are long, place your stop-loss order below 10,730), so that a clear move past this level results in a minor loss, not a major one. Keep position sizes small prior to the Bank decision since a surprise could affect both sterling and the FTSE. A weaker pound will benefit miners and drug companies with international earnings, while a stronger pound will negatively impact these same sectors. Review the economic calendar before making any trades. If you are unable to monitor the screens throughout the entire trading session, consider setting price alerts at 10,730 and 10,890 and allow the market to come to you. This is better than simply guessing.
Three Scenarios
Bullish: a daily close above 10,890 targets 10,990.
Bearish: a close below 10,730 exposes 10,542, then 10,367.
Neutral: range-bound between 10,730 and 10,890 into the BoE.
Short-term wise, Thursday’s decision and the news about oil are what is driving things. Longer term, as prices go up so do dividends. However, gilt yields are going to put pressure on this Bank of England’s July survey expected Bank Rate to stay at 3.75% through December, so a hike goes against that view. Does the Footsie finally clear 10,890, or does 10,730 cracks first? Decide your stop before Thursday.
Frequently Asked Questions
What is the key FTSE 100 resistance?
The sellers have twice held 10,890 as their upper limit for selling and on each occasion the weekly top has been 10,990.
Where is FTSE 100 support?
The next level of support is 10,730. If we fall below this level, keep an eye on 10,542 and the previous low in September at 10,367.
When does the Bank of England decide?
The next decision from the Bank of England will take place on November 5, 2026. Financial markets anticipate that the Bank of England will increase interest rates by 25 basis points (or 0.25%) to 4.00%.
What is your outlook on FTSE 100?
Anonymous · no sign-up · results from the last 30 days · not investment advice