Two trades to watch: FTSE, EUR/GBP

FTSE rises post Fed & ahead of BoE. EUR/GBP rises with eyes on the UK central bank and PMIs.

Brexit 1

FTSE rises post Fed & ahead of BoE 

The FTSE, along with its European peers is heading higher, upbeat after a strong close on Wall Street.  Investors reacted well to the Federal Reserve pushing back tapering bond purchases until later in the year. 

Concerns over the indebted Chinese Evergrande also eased boosting sentiment. 

All eyes are now on the BoE which is due to give its monetary policy announcement later today. The bank is not expected to move on policy. All eyes will be on whether any other policy makers join Michael Saunders in voting to reduce QE early. 

What to expect from the BoE 

Where next for the FTSE? 

The FTSE rebounded from 6825 pushing back above the 200 sma. Its extension above the 50 sma and horizontal support at 7095 in addition to what appears to be a bullish crossover on the MACD are keeping the bulls optimistic of further gains. 

Buyers will be looking towards 7155 the falling trendline resistance ahead of 7195 the September high in order to bring 7235 back into play. 

 

EUR/GBP rises with BoE & PMIs in focus 

Inflation is expected to jump to a record high in September. However, the BoE is not expected to move on rates. Should more BoE policy makers vote in favour of winding down the QE programme early, the Pound could get a boost. The UK central bank is not expected to hike interest rates until mid next year. 

In addition to the BoE PMI data from the Eurozone and the UK will be in focus. Eurozone manufacturing and service sector PMIs are expected to rise in September after the spread of Delta covid was brought under control. 

Learn more about the BoE 

Where next for EUR/GBP? 

EUR/GBP pushed higher at the start of the week extending gains to a weekly high of 0.8613 yesterday. The shooting start candle at yesterday’s high hints towards a bearish reversal and a pullback for the pair.  

However, the bullish MACD and the hold above the 100 sma on the daily chart are keeping buyers hopeful.  

Resistance can be seen at 0.8613. A break above this level could bring 0.8675 the July high back into focus. 

On the flip side, should the 100 sma at 0.8573 fail to hold, support can be seen at 0.8545 the 50 sma. A break below here could bring 0.8512 into focus 

 

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.



More from Trade Ideas

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.