The UK 100 cash index has tentatively returned inside its 7,601-7,687 rectangle that acted as strong resistance during the January-December 2022 period. The index has been trading mostly sideways over the past few sessions despite the fact other developed stock market indices have been recording higher highs for 2023.

Despite the considerable white space, a tentative symmetrical triangle is gradually forming. This is an indication of market participants staying on the sidelines ahead of the key events in the UK and globally. This hesitation is somewhat depicted in most momentum indicators.

Specifically, the RSI is hovering just below its 50-threshold point and the stochastic oscillator has been moving sideways lately. It is currently trying to break below its moving average but it’s too early to interpret this move as a bearish sign. Interestingly, the Average Directional Movement Index (ADX) appears to give the clearer signal as it is edging higher and pointing to a decent bearish trend.

Should the bears manage to overcome the lower boundary of the aforementioned rectangle, they would quickly come up against the support set by the 200-day simple moving average (SMA) and the 38.2% Fibonacci retracement level of the October 13, 2022 – February 16, 2023 uptrend in the 7,530-7,533 range. The path would then be clear until the 7,375 level, provided that the March 20, 2023 upward trendline is successfully broken.

On the other hand, the bulls are keen on pushing the index above the 7,703 level, the upper boundary of the much-talked about rectangle. The 7,727-7,752 range, populated by the 23.6% Fibonacci retracement and the 100-day SMA respectively, awaits them, a tad below the Jan 15, 2018 high of 7,806.

To sum up, the UK 100 index is hovering inside a much-analyzed rectangle as market participants remain on the sidelines for now and await the key events’ impact.