European Open: EUR/USD Probes 1.1800, WTI Bulls Challenge $70

A bullish engulfing candle formed on WTI on Friday at the 100-day eMA, which has placed a bullish breakout onto our radar.

Energy 3

Asian Indices:

  • Australia's ASX 200 index rose by 4.7 points (0.06%) and currently trades at 7,411.30
  • Japan's Nikkei 225 index has fallen by -65.14 points (-0.21%) and currently trades at 30,316.70
  • Hong Kong's Hang Seng index has fallen by -519 points (-1.98%) and currently trades at 25,686.91

UK and Europe:

  • UK's FTSE 100 futures are currently down -1.5 points (-0.02%), the cash market is currently estimated to open at 7,027.70
  • Euro STOXX 50 futures are currently down -3 points (-0.07%), the cash market is currently estimated to open at 4,167.35
  • Germany's DAX futures are currently down -13 points (-0.08%), the cash market is currently estimated to open at 15,596.81

US Futures:

  • DJI futures are currently down -151.69 points (-0.43%)
  • S&P 500 futures are currently up 10.5 points (0.07%)
  • Nasdaq 100 futures are currently up 8 points (0.18%)


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Indices

The ASX 200 posted minor gains and retested its 200-day eMA (from below), thanks to rising energy stocks and news that Sydney Airport had received an improved takeover bid. Japanese equities failed to push higher after last week’s strong rally, with the TOPIX and Nikkei trading in tight ranges just below last week’s highs. China’s indices were in the red with property and construction stocks weighing on the broader market. The Hang Seng traded around -2% lower and the CSI300 fell -0.5%.

A small bullish inside candle formed on the FTSE 100 on Friday, although given it fell -2.6% between Tuesday and Thursday, it may be due a period of consolidation anyway. Whilst prices hold above 7000 then odds favour a retest of 7089 (prior support) whilst a break below 6993 assumes bearish continuation.


FTSE 350: Market Internals


FTSE 350: 4069.07 (0.07%) 10 September 2021

  • 135 (38.46%) stocks advanced and 195 (55.56%) declined
  • 12 stocks rose to a new 52-week high, 6 fell to new lows
  • 70.09% of stocks closed above their 200-day average
  • 56.41% of stocks closed above their 50-day average
  • 17.95% of stocks closed above their 20-day average

Outperformers:

  • + 3.50%   -  Antofagasta PLC  (ANTO.L) 
  • + 3.27%   -  Discoverie Group PLC  (DSCV.L) 
  • + 3.07%   -  EVRAZ plc  (EVRE.L) 

Underperformers:

  • -5.41%   -  IP Group PLC  (IPO.L) 
  • -4.07%   -  International Consolidated Airlines Group SA  (ICAG.L) 
  • -3.98%   -  Tui AG  (TUIT.L) 


Forex:

It was narrow ranges for currency markets overnight, due to a lack of news flow. And that could be a similar case in today’s European and US sessions with no high volatility calendar events scheduled.

EUR/USD is considering a break below 1.1800. Its rally from the August low failed to close above the 200-day eMA and momentum has now turned lower over the past week. A bearish hammer formed on Friday and we’ve now seen 3 daily closed beneath the 50-day eMA. A break below 1.1800 assumes bearish continuation.

GBP/JPY rose to a 1-month high on Friday before reversing at trendline resistance and forming a bearish pinbar. A break below 151.42 suggests another leg lower whilst a break above Friday’s high of 152.64 is required to confirm a bullish breakout.

Should sentiment turn against the British pound then GBP/NZD is one for bears to consider. The daily chart is trading within a potential bear flag formation after hitting our initial 1.9330 target last week. It remains below its 200-day eMA and a Spinning Top Doji formed on Friday, so it’s possible we have seen the corrective high already.


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Commodities:

WTI has been effectively rangebound between 67 – 70 over the past two weeks. There have been intraday attempts to break above 70 but we’re yet to see a daily close above it, although we think we’re close to seeing just that happen. Prices have held above the 38.2% Fibonacci retracement and 100-day eMA and the more volatile days have been bullish. Moreover, Friday closed with a bullish engulfing candle to show increased bullish interest above 67, so we’re now waiting for a break above 70.61 to assume trend continuation.

Platinum futures fell to a 14-month low overnight and traded temporarily below 2100. As prices have recovered and now trade slightly higher, it shows the potential to form a bullish hammer at the end of an extended move. So we’d prefer to see if pries can consolidate below 2185 (prior support) before reconsidering shorts.


Up Next (Times in BST)

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