European Open: Brent breaks $77, FTSE on Track for Bullish Week

Oil prices remained firm overnight, which saw WTI and brent touch new multi-week high. Yet with key resistance overhead, we may see a retracement ahead of the weekend.

Energy 2

Asian Indices:

  • Australia's ASX 200 index fell by -29.2 points (-0.4%) and currently trades at 7,341.00
  • Japan's Nikkei 225 index has risen by 613.46 points (2.07%) and currently trades at 30,252.89
  • Hong Kong's Hang Seng index has fallen by -6.87 points (-0.03%) and currently trades at 24,504.11

UK and Europe:

  • UK's FTSE 100 futures are currently down -1 points (-0.01%), the cash market is currently estimated to open at 7,077.35
  • Euro STOXX 50 futures are currently down -4.5 points (-0.11%), the cash market is currently estimated to open at 4,190.42
  • Germany's DAX futures are currently down -4 points (-0.03%), the cash market is currently estimated to open at 15,639.97

US Futures:

  • DJI futures are currently up 506.5 points (1.48%)
  • S&P 500 futures are currently down -9.5 points (-0.06%)
  • Nasdaq 100 futures are currently up 1.25 points (0.03%)


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Indices

Equity markets were mixed overnight which saw China’s benchmark indices post minor gains, and Japan’s markets rise around 2% as they played catch up after yesterday’s holiday. The ASX 200 was a weak performer and currently trades around -0.4% lower as it failed to retest yesterday’s high.

The FTSE has been playing with the same key levels since it broke beneath trend support on the 7th September. The rebound from the July’s low paused at 7,000, broke higher the next day and tested 7090, then yesterday’s breakout stopped just shy of touching the 7138.35 support level that broken on the 7th September (then closed back below 7090 with a bearish pinbar). So these levels remain important heading into the weekend. Take note that it is on track for a bullish engulfing / outside week which found support at the 200 and 50-week eMA’s, which paints an upside bias over the coming week/s if we see a strong close today. It may even have another crack at breaking those cycle highs. As for today, 7060 ad 7030 are key support levels for bulls to defend. And without a fresh catalyst it may struggle to post another solid gain today.


FTSE 350: Market Internals


FTSE 350: 4095.31 (-0.07%) 23 September 2021

  • 190 (54.13%) stocks advanced and 149 (42.45%) declined
  • 20 stocks rose to a new 52-week high, 4 fell to new lows
  • 71.51% of stocks closed above their 200-day average
  • 66.1% of stocks closed above their 50-day average
  • 16.52% of stocks closed above their 20-day average

Outperformers:

  • + 7.47%   -  Darktrace PLC  (DARK.L) 
  • + 6.00%   -  Telecom Plus PLC  (TEP.L) 
  • + 5.36%   -  Hilton Food Group PLC  (HFG.L) 

Underperformers:

  • -6.42%   -  Harbour Energy PLC  (HBR.L) 
  • -4.84%   -  Entain PLC  (ENT.L) 
  • -4.56%   -  888 Holdings PLC  (888.L) 


Forex: German IFO up next

It was very narrow ranges for currency pairs overnight as traders across Asia have seemingly called it a week. Japan’s annual CPI read stopped deflating for the first time since June 2020, all thanks to rising energy costs. At 0%, inflation remains a long way from the BOJ’s 2% goal, but we’re sure they will take it.

Germany’s IFO business report is released at 09:00 BST. EUR/USD is coiling up just below yesterday’s bullish engulfing high, so a solid report could see it break above its current range and to new highs.

In a similar fashion, GBP/CHF is also consolidating in a potential continuation pattern on the hourly chart where a break above 1.2708 breaks the cycle high and places price back above the weekly S1 pivot. Key support (or potential bearish target) remains at 1.2650.

USD/JPY has continued higher with little in the way of a pullback, as it tracks global yields. 110.45 is a key resistance level for bulls to conquer this session.


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Commodities: Brent edges closer to July high

A strong trend has been developing on brent futures four-hour chart. A series of higher lows has formed since its August low and bullish momentum has increased leading into the July. That, along with bullish fundamentals favours an eventual break above 78.00. However, it’s possible we may see prices initially retrace from that level as it is a key swing high, we’re approaching the weekend (so some trades will want to square up ahead of the weekend) and the weekly R2 pivot is also in the area. Should the US dollar strengthen it likely increases the odds of a countertrend move ahead of the weekend, but we would still be interested in bullish setups above the 75.63 – 76.55 zone in anticipation of a break later on. Alternatively, bulls could wait for a break above $78 and see if it turns resistance into support.


Up Next (Times in BST)

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