Two trades to watch: EUR/GBP, Tesla

GBP/EUR edges higher with inflation in focus. Tesla reports Q3 earnings after the close.

Charts (4)

GBP/EUR edges higher with inflation in focus

GBP/EUR is attempting to claw higher after UK CPI inflation missed forecasts. UK CPI printed at 3.1% in September down from 3.1% and short of forecasts of 3.2%. However, this remains well above the BoE’s 2% target.

Eurozone inflation is very much in focus with German PPI expected to show 12.7% YoY rise in September, up from 12% in August.

Eurozone CPI is also due; this is a final revision so potentially not as market moving. Expectations are for 1.9% YoY rise, up from 1.6% in August. ECB speakers will also be in focus.

Any gains in the Euro could be limited owing to the dovish ECB

Learn more about the Euro

Where next for EUR/GBP?

EURGBP trades below its 50 & 200 sma on the 4 hour chart and below its falling trendline dating back to late September. The price has found a floor for now at 0.8423, the October low.

The RSI is pointing higher but remains in bearish territory suggesting that this could be a corrective pick up.

The pair is approaching the falling trendline resistance at 0.8445, bringing the weekly high of 0.8460 into focus and exposing the 50 sma at 0.8465. A move above here would negate the near-term bearish bias. It would take a move above 0.85 horizontal resistance for buyers to gain traction.

Rejection at the trendline resistance could see the pair retest 0.8425 bringing 0.8390 the January ’20 low into play.

EURGBP Chart

Tesla Q3 earnings after the close.

Tesla is due to report after the market close. Tesla has already disclosed deliveries of 241,300 in Q3 a new record, up 20% on the previous quarter.

Thanks to the delivery numbers, revenue is expected at around $14.005 billion.

Whilst Tesla reinvests most of its money into growth, a profit is still expected. EPS is expected at $1.59.

Read in dept about what to expect from Tesla

Where next for Tesla share price?

Tesla has broken out of its ascending dating back to mid-May. It trades above its 50 & 200 sma in a clearly bullish chart.

The RSI is firmly in overbought territory some consolidation or an ease back at some point could be on the cards.

Tesla is has been probing a key resistance level at $870 -$880 the February high. A close above this level could cement the way towards $900 amd fresh all-time highs.

Meanwhile, it would take a fall below $765 to change the bullish bias and for bears to gain traction towards $740 the 50 sma and the lower band of the rising channel.

Tesla chart


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.

 

 

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.