Two trades to watch: WTI oil, EUR/GBP

WTI falls for a second day after an unexpected rise in inventories. EIA data in focus. EUR/GBP eases with Eurozone economic sentiment data due.

Energy 3

WTI falls for second day 

Oil prices are heading lower for a second straight session after a surprise build in US crude oil supplies. 

API data revealed a build of 4.127 million barrels well over a draw of 2.333 million barrels expected and after a 6.1 million draw recorded the previous week. 

Attention will turn to EIA data which is due later. Should this confirm the build, it will be the first build in 2 months. 

Oil rallied hard across the past week on tight supply concerns and as demand rises as countries emerge from pandemic lockdowns. The OPEC world oil outlook report sees demand outstripping 

An energy crunch in Asia is also helping to underpin the price of oil.  

Learn more about trading oil 

Where next for WTI oil prices? 

 WTI oil continues to trade within an ascending channel dating back to August 23rdon the 4 hour chart. After finding resistance at 7660 the July high, the price is falling lower, taking out support at 76.00 and 74.00 the previous double tops.  The bearish crossover on the MACD supports further downside. 

It would take a move below 72.63 the 50 sma and 71.35 the lower band of the rising channel for sellers to gain traction.  

A recovery would need to retake 74.00 and 76.00 in order to make another attempt of 76.60 


EUR/GBP looks to economic data 

EURGBP posted its largest gain in six months, taking the pair to a two-month tops.  

The Euro rallied following upbeat German consumer confidence whilst the Pound slumped as the outlook for the UK economy darkened. Supply chain bottlenecks, labour shortages, no petrol at the pumps combined panicking investors who sold the pound. 

Looking ahead Eurozone consumer confidence data will be in focus in addition to speeches from ECB’s Lagarde and BoE’s Andrew Bailey. 

Learn more about the Euro

Where next for EUR/GBP? 

The rally in EUR/GBP found resistance just shy of the 200 sma in the previous session at 0.8641. The price is seen easing in early European trade. Should support hold at 0.8613 the high September 7th & 23rd the bulls will remain hopeful of another attempt of the 200 sma at 0.8650.  

Meanwhile a move below 0.8613 could bring the 50 sma at 0.8550 into focus. It would take a move below the rising trendline support at 0.8530 for the sellers to change the bias. 

How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade.

Build your confidence risk free

More from Trade Ideas

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.