Two trades to watch: FTSE, Gold
Fiona Cincotta December 10, 2021 8:12 AM
FTSE falls as economic growth stalls. Gold edges lower ahead of US CPI data.
FTSE falls as economic growth stalls
The FTSE is moving lower after a weak handover from Wall Street and Asia.
UK GDP MoM in October came in at 0.1%, well down from 0.6% in September and below forecasts of 0.4% growth.
Industrial production and manufacturing grew by less than expected, at 1.4% and 1.3% respectively
Risk off dominates amid renewed concerns over COVID as growth showed signs of slowing even before the tighter COVID restrictions were brought in, which doesn’t bode well for the coming winter months.Learn more about the FTSE
Where next for the FTSE?
The FTSE ran into resistance at 7380 on it runup from the late November low. The price is easing lower. However, it remains above the rising trending line and the 50 & 200 sma on the 4-hour chart.
The MACD points to further losses, however it would take a move below 7200 the 50 sma to negate the nest term up trend and move below 6971 for sellers to gain traction.
With the uptrend still intact this still looks like a buy the dips set up, resistance at 7380 ahead of 7400 the post pandemic high.
Gold edges lower ahead of US CPI data
Gold is edging mildly lower, as the US Dollar strengthens, ahead of US CPI inflation data. Expectations are for CPI to jump to 6.8%, its highest level in almost 40 years. Core CPI is expected to rise to 4.9%, it is already at a 30 year high.
With inflation above the Fed’s target 2% and accelerating, another elevated reading could prompt the Fed to accelerate the tapering of its bond purchases at the Fed meeting next week and ultimately raise interest rates sooner. This would be bad news for non-yielding gold.Learn more about trading Gold
Where next for gold prices?
Gold extended gains from its December low, running into resistance at 1793. The price has been falling lower since, break below its week old rising trendline and below its 50 sma on the 4 hour chart.
The RSI is support of further losses whilst it remains out of oversold territory.
Sellers will look for a move below support at 1772 the weekly low, to open the door towards 1761/59 the December/November low.
Any recovery needs to retake the 50 sma at 1780 and the rising trendline resistance at 1785. It would take a move over 1793 for bulls to gain traction.
How to trade with City Index
Follow these easy steps to start trading with City Index today:
- Open a City Index account, or log-in if you’re already a customer.
- Search for the market you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels
- Place the trade.
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.