Two trades to watch: FTSE, EUR/USD

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



Build your confidence risk free

More from FTSE 100

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.