Two trades to watch: FTSE, EUR/USD

FTSE edges higher after steep losses last week. EURUSD trades under pressure as US inflation concerns & German election fears loom.

Charts (4)

FTSE edges higher 

Indices in Europe are starting the week in a mixed fashion after a week of heavy losses last week  and ahead of a busy week on the economic calendar.

The FTSE is outperforming its peers, oil prices are on the rise along with aluminium.

Last week the British government voted to hike taxes, lifting NI contributions which businesses warned could strangle the recovery. Meanwhile the BoE Governor Andrew Bailey’s hawkish comments lifted expectations of a rate hike sooner rather than later.  

Learn more about the FTSE 

Where next for the FTSE? 

The FTSE has been trading within a holding pattern across the past month capped on the upside by 7200 and on the lower band by the key psychological level 7000. After the steep sell off last week, falling to the 50 & 100 sma, the price is towards the lower band. The move higher in the RSI is keeping buyers hopeful, although it remains in bearish territory 

It would take a move above 7085/7090 the 50 & 100 sma to negate the bearish trend and for buyers to gain traction towards 7200 and 7235 the August high. On the downside a move below 7000 could open the door to 6930 the July 27 low 

 

EUR/USD trades at two week low 

The cautious mood on the market amid rising US inflation fears and Fed tapering concerns is booting the USD. 

Meanwhile the Euro is moving lower on concerns over the upcoming German elections. Last week thew ECB slowed the pace of bond purchases as inflation sits at an almost decade high. 

The Eurozone economic calendar is quiet this week which could work against the Euro leaving elections concerns and the US Dollar in the driving seat. 

Learn more about the Euro 

Where next for the EUR/USD? 

EURUSD rebounded off support at 1.1660 and rallied higher hitting resistance at 1.1900. The shooting star candlestick at 1.1900, a reversal patter, was followed by declines towards the 50 sma. 

The price has fallen through the 50 sma at 1.18 and the receding bullish bias on the MACD is keeping the sellers optimistic of further declines towards 1.1740 the August 27 low and 1.1660 the August low. 

Any meaningful move higher would need to retake the 50 sma at 1.18 in order to look ahead to 1.19. 

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