Two trades to watch: EUR/USD, FTSE

EURUSD looks towards 1.22 ahead of German IFO business sentiment data FTSE trends cautiously higher on US stimulus hopes

Charts (1)

EUR/USD rises ahead of German IFO data

The EUR/USD is edging higher towards 1.22 on a broadly upbeat market tone and weaker US Dollar ahead of German IFO business sentiment data.

German IFO Expectations is expected to rise to 93.2 in January, up from 92.8 in December.

A stronger than forecast reading would add to the above forecast manufacturing PMI released on Friday and point to a continued recovery in the Eurozone’s largest economy despite resurgent covid cases and tighter lockdown restrictions. This could propel the Euro towards 1.22.

ECB Christine Lagarde is also due to speak, which could inject further volatility into the pair.

Hopes of additional US stimulus keeps tone surrounding USD soft. However, skepticism over Biden’s ability to push the package through poses downside risk to the pair.

EUR/USD technical analysis

After breaking out of the descending channel pattern late last week, EUR/USD rose to a 10 day high of 1.22 but lacked follow through. Today the pair is trading quietly in consolidation ahead of the data release at 1.2180.

Bulls could wait for a break above 1.22, the 100 sma and round number before taking a position. A break abovethis level could open the door to 1.2235 (high 13th Jan) and a break through here could see the pair push on beyond 1.23 resuming the ongoing longer term upward trend.

On the flip side 1.2130 (50 sma) offers immediate resistance ahead of 1.21. A brsk below this level could see 1.2050 come into play before the key 1.20 psycological level.

FTSE rises cautiously on US stimulus hopes & ahead of big US earnings week

The FTSE is edging cautiously higher on US stimulus optimism. Hopes are rising that $1.9 trillion covid stimulus package be pushed through Congress in the coming weeks. This is lifting risk sentiment making riskier assets like stocks more attractive. The deal would also be a boost for London listed companies that do business with the US.

The UK earnings calendar is relatively quiet this week but earnings from US tech giants such as Apple, Facebook, Tesla and Microsoft could still impact the FTSE 100.

UK retailers will be in focus following news that Boohoo will acquire the Debenhams brand and website.

FTSE technical analysis

The FTSE is trading below its 50 and 100 sma on the 4 hour chart and also below the descending trendline dating back to early January. 

The RSI  is also trending lower and remains below 50 pointing to further weakness. However, the longer term ascending trendline remains in tact.

A break out over 6742 the 50 sma and the descending trendline is needed to negate the current short term bearish trend. Beyond there look for horizontal resistance at 6810.

On the downside support can be seen at 6650 (Friday’s low) prior to 6600 round number & swing low 5th January.

Learn more about trading indices.

More from FTSE 100


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.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital 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), GAIN Capital Singapore 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 GAIN Capital Singapore 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 GAIN Capital Singapore 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.

GAIN Capital Singapore 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 for the complete Risk Disclosure Statement.