Two trades to watch: FTSE, WTI oil
Fiona Cincotta September 15, 2021 7:38 AM
FTSE extends losses bringing key support into focus. WTI oil looks to EIA stock pile data
FTSE extends losses
The UK index is heading for a mildly softer start following UK inflation data and weak Chinese data overnight.
UK inflation jumped to 3.2% YoY in August, up from 2% in July and ahead of 2.9% forecast. Core CPI also surged to 3.1%, up from 1.8%. Rising inflation, combined with yesterday’s encouraging jobs report raises bets that the BoE could move to hike interest rates sooner rather than later.
Overnight, weak Chinese data reinforced concerns over slowing global growth. Growth in Chinese factories and retail sales continued slowing.
Where next for the FTSE?
The FTSE is set to open a few points lower, extending losses from the previous session. The index has been trading within a 200 point range over the past 6 weeks, capped by 7200 on the upside and 6990 on the lower band. The RSI is in bearish territory and pointing lower suggesting that there could be more downside to come.
The downside is guarded by 6990 last week’s low. A break below this level could open the door to 6925 July 27 low and on to 6804 July low.
Meanwhile, any recovery would need to retake the 100 & 50 sma at 7078 and7090 respectively. A move above here could bring 7200 last week’s high back into play.
Oil looks to EIA data
Oil prices are on the rise after industry data revealed a larger than expected draw down in inventories and on optimism surrounding he demand outlook. The API data revealed that crude stockpiles fell by 5.4 million barrels, expectations had been for a 3.5 million decline
Furthermore, the hit from Hurricane Ida was larger than anticipated and now Tropical storm Nicholas is in the region.
Meanwhile the IEA said that after demand fell owing to the delta variant, a rebound in demand is expected heading towards the end of the year.
Weaker Chinese data limits the upside.
EIA stockpile data due later.
Where next for WTI crude oil?
Oil moves higher for a third straight session. The falling trendline dating back to mid-July guards the upside whilst the 50 & 100 sma are protecting the downside. The RSI is supportive of further gains.
Any move higher must break above the falling trendline resistance at 71.10 in order to test 72.00 round number and head towards 74.00 the August high.
On the flip side, a move lower must break below the 50 & 100 sma at 6930 and 6900 respectively to head towards support at 67.45 the September low and 65.00 the July low.
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.