Two trades to watch: GBP/USD, Euro Stoxx

GBP/USD in focus as Jackson Hole kicks off & ahead of US PCE, GDP Q2. European indices slip after weak German GFK consumer confidence data, ECB minutes due.

Charts (6)

GBP/USD looks to Jackson Hole, US PCE & GDP Q2 (second reading)

GBP/USD trades is edging lower snapping a three-day winning run 

Post Brexit supply chain issues mean food shortages could last well into next year supermarkets warn. 

Covid cases continue to rise in the UK and currently stand at over 30,000 new daily cases before the school’s return. Fears of a surge in cases in September weigh on the Pound. 

US Dollar rises ahead of the Jackson Hole Symposium in cautious trade, although Fed Chair Powell’s keynote speech is on Friday. 

Also due today US PCE data and the second reading of US Q2 GDP. 

Learn more about the Pound 

Where next for GBP/USD? 

GBP/USD has been trending lower since early June. It trades below its descending trending, 50 sma and its 200 sma.  

Whilst the price rebounded off 1.36 last week the recovery failed to break above the 200 sma.  

The receding bearish bias on the MACD keeps buyers hopeful although there is a tough wall of resistance to break through at 1.38 -1.3850 comprised of the 200 sma ((1.38), 50 sma (1.3820) and descending trendline support (1.3850). A break above here would see 1.40 come back into target. 

Any move lower would need to break below the double bottom at 1.3670 to expose 1.36 the August low and 1.3570 the July low. 

 

Euro Stoxx edges lower as German consumer confidence falls

Eurpean indices are heading lower in cautious trade ahead if the Jackson Hole Symposium.   

German GFK consumer confidence came in weaker than expected for September declining -1.2, down from -0.4 in August and below forecasts of -0.7. 

ECB minutes are due to be released from the latest meeting. The minutes could help shape expectations ahead of the ECB meeting on September 9th

The minutes come after dovish comments from ECB chief economist Philip Lane who suggested it was still too soon to consider tapering bond purchases in the PEPP programme. 

Cheap borrowing costs for longer is good news for companies. 

Where next for EU Stoxx 50? 

EU Stoxx 50 has eased lower from its all time high of 4239 reached August 13. Although the uptrend from mid-July remains intact. 

The bearish crossover on the MACD combined with a move below the 50 sma is keeping seller’s hopeful of further downside.  

Any move lower would need to take out 4160 the Tuesday’s low to expose 4120 the 200 sma and the ascending trendline resistance. Beyond here 4080 the August 19 low comes into play 


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.