The FTSE 100 index is retreating as traders wait for important corporate earnings from the UK. Futures tied to the index are down by 0.30% and are trading at £7,032. Other global futures are also down, with the Dow Jones, S&P 500, and Nasdaq 100 indices falling by about 0.10%.
FTSE 100: The focus among traders this week will be the upcoming earnings from some of the leading companies in the UK. Some of the firms that will publish their earnings are Royal Mail, Vodafone, Imperial Brands, National Grid, Kingfisher, Ryanair, and EasyJet, among others.
While most of these companies are not members of the FTSE 100 index, most of them have an important role in it. For example, results of easyJet tends to have an impact on companies like IAG and Rolls-Royce.
The FTSE 100 index will also react to important macro events in the United Kingdom. The Office of National Statistics (ONS) will release the latest UK retail sales, inflation, and GDP numbers. Stronger numbers could push the index lower because it will send a signal that the Bank of England (BOE) will start hiking interest rates earlier than expected.
FTSE 100 technical outlook
The four-hour chart shows that the FTSE 100 index has been in a recovery mode after it declined to 6,821 last week.. The index ended the week at 7,050, which was 3.50% above the lowest level. The upward trend is also being supported by the 25-day and 50-day moving averages.
At the same time, it seems to be forming a head and shoulders pattern, which is usually a bearish signal. Therefore, I suspect that the index will keep dropping as bears target the neckline of this pattern at around 6,850. Still, a move above 7,100 will invalidate the H&S pattern and this prediction.
FTSE index chart
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