Two trades to watch: FTSE, EUR/USD
Fiona Cincotta September 30, 2021 1:59 PM
FTSE extends gains boosted by upward revision to GDP. EURUSD struggles around yearly lows ahead of German CPI, US GDP & jobless claims.
FTSE extends rebound, UK GDP revised higher
The FTSE along with European peers are heading higher after an upbeat close on Wall Street and still recovering from Tuesday’s selloff.
The UK economy performed better than expected in the second quarter which is helping to boost sentiment. GDP was upwardly revised to 5.5%, from 4.8%. This is a steep improvement from 1.6% contraction in the previous quarter.
Concerns over supply chain bottle necks, labour shortages, and slowing growth in China remain.Learn more about the FTSE
Where next for the FTSE?
The FTSE extends gains from the September 20 6825 low. The push above the 50 sma combined with the bullish RSI is keeping buyer’s hopeful pf more upside.
Immediate resistance can be seen at 7155 the falling trendline resistance, a break above here could see 7200 the September high come into play.
Immediate support can be seen at 7090 the 50 sma and horizontal support. A break lower could expose 6990, the August 19 low.
EUR/USD struggles at yearly lows with German CPI, US GDP due
EURUSD is attempting to move higher after 3 consecutive days of losses which took the pair to its lowest level since July 2020.
US Dollar is easing today but remains supported amid expectations that the Fed will start tapering bond purchases later this year.
Meanwhile the Euro has sold off on central bank divergence.
German CPI data is expected to show that inflation ticked higher to 4.2% YoY up from 3.9% in August. This could prompt the ECB towards a more hawkish bias.
Separately US GDP Q2 final reading is due later and is expected to confirm growth of 6.6% QoQ.
US jobless claims are expected to ease lower again to 335k, down from 351k
Where next for EUR/USD?
EURUSD trades around the yearly low at 1.16 yesterday’s low and a level that it needs to breach in order to extend losses.
The RSI is in oversold territory which could provide an obstacle for the bears and could the weekly 200 sma and January 2019 high at 1.1575. Beyond here 1.1500 the round number and March 2020 high comes into play.
Any meaningful recovery must retake horizontal resistance at 1.1650 and the falling trendline resistance at 1.17, exposing the 50 sma at 1.1770
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