Two trades to watch: FTSE, Gold

FTSE declines, UK economy grew slower than forecast in August. Gold looks to US CPI.

FTSE declines, UK economy grew slower than forecast in August

The FTSE along with European stocks are heading for a broadly softer start on Wednesday, weighed down by inflation concerns and disappointing UK data.

UK GDP MoM in August rose by a less than expected 0.4%. Expectations had been for a 0.6% increase. Industrial production grew at a slower pace of 4.1% in September, down from 6% in August and missing forecasts of 6% as supply chain bottlenecks bite.

Learn more about the FTSE

Where next for FTSE?

The FTSE retaking its 50 sma on the daily chart combined with the bullish MACD is keeping the buyers hopeful of further upside. However, the long wicks indicate selling pressure at these levels and the FTSE has once again struggled at the falling trendline resistance dating back to early August.

Any meaningful recovery would need a close above the said trendline in order to target 7150 the October high ahead of 7186 the September high.

On the flipside, a move below the 50 sma at 7098 could open the door to 7053 this week’s low. A move below here could see the sellers gain traction and bring 7000 the key psychological level into play.

FTSE chart

Gold looks to US CPI

Gold is holding steady after gains in the previous session.

An easing of treasury yields, the IMF trimming global growth forecasts and a risk off mood amid the ongoing Evergrande crisis helped lift gold to 1769. However, risk aversion then boosted the US Dollar to yearly highs. Hawkish comments by Fed speakers Clarinda and Bostic dragged on the yellow metal which settled at 1759.

Today the edgy market mood is underpinning the yellow metal. Gold now looks to the release of the US CPI data and the minutes from the FOMC for further clues. CPI is expected to print at 5.3%. Core CPI at 4%.

Where next for Gold?

Gold failed to capitalize on a breakout from the falling wedge and instead has traded relatively range bound so far in October, capped on the upside by 1770 and on the lower side by 1745. The RSI is offering few clues trading lifelessly around 50.

Buyers might look for a move over 1770 in order to attack the 50 sna at 1775 which would then expose the 200 sma at 1796 and the falling trendline resistance at 1800.

On the downside a move below 1745 could open the door to 1720 the September low, before 1679 the August low comes into play.

Gold chart  

How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade.




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.