Two trades to watch: FTSE, EUR/USD

Fiona Cincotta January 29, 2021 6:55 PM

FTSE trades at monthly low as the mood in the market sours EUR/USD tests 1.21 ahead of German Q4 GDP data

Charts (3)

FTSE trades at monthly low

FTSE trades at 4 week low as the mood in the market deteriorated and investors take risk of the table.

Escalating US – China tensions, mixed Novavax covid vaccine data and concerns over the retail short squeeze trade frenzy over the past few days are all weighing on sentiment heading towards the open.

Here analyst Matthew Weller looks at the retail traders rebellion in more depth.

FTSE technical analysis

The FTSE trades at a 4 week low. It trades below its descending trendline dating back to mid-January  and below its 50 & 100 sma on the 4 hour chart. The 50 sma also crossed below the 100 sma in a bearish signal. 

The RSI is trending lower and in bearish territory and is supportive of more selling action whilst it remains above 30.

The price is testing support at 6435 a level last seen in late December. A break through here could open the door to 6305.

An attempted recovery would need to clear 6550 yesterday’s high in order to advance towards 6650 the confluence of the descending trend line and 50 sma. A break above this level could negate the current bearish trend.

Learn more about trading indices


EUR/USD tests 1.21 ahead of German GDP data

EUR/USD is testing 1.21 amid a downbeat market mood and ahead of the German GDP reading.

Whilst Germany has been in lockdown hitting activity in the service sector, the manufacturing sector has remain resilient. A better than forecast reading could help boost the Euro against the safe haven lifted USD.

French GDP contracted less than forecast in Q4 -1.3% vs -4% expected, annually contracted -8.3% vs 11% forecast.

EUR/USD technical analysis

EUR/USD remains on the defensive after falling through the 50 sma on the 4 hour chart yesterday bringing attention to 1.2050 horizontal support. This appears to be a solid support and may not be easy to break through.

Should the price crack this level, September’s high and key psychological level 1.20 will come into target.

Should 1.21 hold an attempted recovery will see resistance at 1.2140/5 level the confluence of the 50 sma an the descending trendline. A move above 1.2180 could see more bulls jump in.

Learn more about trading forex



TAGS:
FTSE 100

More from FTSE 100

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.