FTSE 100

Two trades to watch: FTSE, Brent

FTSE treads water before PMI data. Brent strikes $75.00
FTSE looks to PMI data

The FTSE along side European stocks are swimming stroke , despite a stronger finish on Wall Street. Federal Reserve System Chair Jerome Powell reassured the markets over inflation and monetary policy, calming market nerves.

Markets are beginning to stabilize after the Fed’s hawkish turn last week. Meanwhile tensions between US and China rose after a US sailed through the Taiwanese straight.

PMI data are going to be focused . UK PMI data is predicted to point out that the manufacturing sector continued expanding at a powerful pace in June at 64, although just down slightly from 65.9 in May. The services sector PMI is forecast at 62.8, marginally down from 62.9 in May.

Where next for the FTSE?

The FTSE broke below its ascending channel at the top of last week. The index spiked to a coffee of 6950 below pushing back over 7000 key psychological level and finding support on its 50 sma at 7030.

The index continues to increase the rebound today with the RSI supportive of further upside. Buyers could look towards resistance at 7120 high June 2 before 7170, the confluence of the lower band of the ascending channel and June 10 high.

The 50 sma could offer support at 7030. an opportunity below this level could negate the near term up trend. it might take a move below 6950 for the bears to realize traction.

Brent hits $75.00

Oil is pushing higher as rising fuel demand drained inventories.

API data revealed 7.1-million-barrel draw, well before the three .6 million forecast, this comes following an 8.5 million draw last week.

Fuel demand has been boosted by key markets like US, China and Europe reopening their economies.

EIA inventory data is due later today.

OPEC+ will meet to debate output next week and will look to boost production.

Where next for Brent?

Brent trades at multi-year highs and hits $75.00. it’s attempting to interrupt out above its ascending channel within which it’s traded since late March.

The RSI is heading into overbought territory which warrants caution for further bullish bets. A period of consolidation or a pull back might be on the cards.

A meaningful give way $75 could see fresh multi year highs achieved, with buyers looking towards $80 round number and psychological level.

It would take a move below $71.50 to negate the near-term uptrend. A move below 65.00 could see sellers gain traction.

European Open: GBP/CHF Rises to 9-week High Ahead of UK Flash PMI

With PMI data released for France, Germany, eurozone, UK and US, this places GBP, EUR and USD pairs into focus for news traders.
APAC flash PMIs off to a soft start
A lift of coronavirus restrictions saw UK business confidence rise to its highest level since 2016, rising 21 percentage points to 11. Furthermore, employers confidence also rose to a near-5-year high of 29. The pound remained flat yet firm overnight, before flash PMI data today.

Flash PMI data for Europe and therefore the US are the most data points today within the calendar. Data from the APAC region came in softer than expected, with Australian manufacturing falling to 58.54 (64.4 prior) and repair right down to 56 (58 prior). This dragged the composite right down to 56.1 from 58.0. it had been an identical case for Japan’s manufacturing sector which expanded at the slower pace of 51.5 compared with 52.3 expected down from 53.

The FTSE 100 rose 0.39% yesterday to a two-day high and has recouped around half Friday’s bearish range. it’s the second strongest performer week so far at 1.03%, with DAX taking top place at 1.22%. an opportunity above 7100 also takes it back above the 10-day eMA, and we’d wish to see prices hold above the 7073.55 low to retain an intraday bullish bias.

FTSE 350: Market Internals
FTSE 350: 4064.49 (0.39%) 22 June 2021

255 (72.65%) stocks advanced and 80 (22.79%) declined
14 stocks rose to a replacement 52-week high, 2 fell to new lows
85.19% of stocks closed above their 200-day average
17.09% of stocks closed above their 20-day average
Outperformers:

  • 7.20% – Sirius land Ltd (SRET.L)
  • 6.71% – Travis Perkins PLC (TPK.L)
  • 6.17% – Beazley PLC (BEZG.L)
    Underperformers:

-3.37% – Network International Holdings PLC (NETW.L)
-3.07% – Capita PLC (CPI.L)
-2.64% – Hargreaves Lansdown PLC (HRGV.L)

Forex: Aussie trade surplus hits a record
Preliminary trade data for Australia saw exports rise 11% and take its trade surplus to a replacement record of A$13.3 billion. 42% of exports were sent China’s way, and ore accounted for 18% of exports last month. AUD/NZD pared around ¾ of yesterday’s losses after probing the weekly low. It nudged its way higher against the yen, euro, pound, Canadian dollar and Swiss franc . AUD/USD is currently -0.04% lower against the dollar. However, with an epidemic in Sydney behind 120 exposure venues, talk about another lockdown is ramping up with QLD following VIC’s move to shut their border with NSW.

The US dollar was the strongest major overnight, rising against all major currencies whilst CHF and NZD were the weakest. GBP/JPY is resting beneath yesterday’s high after reaching out upside target, therefore the UK’s PMI release might be a make or break for bullish momentum over the near term.

GBP/CHF has risen to the highest if its 9-week range before the ecu open, which places 1.2820 because the main focus this session. Over this era of your time , the weekly chart has mostly held above its 200-week eMA and is now trying to accelerate faraway from the 10-week eMA. So there’s a case for a bullish breakout on the upper timeframes, although whether that happens today is yet to be seen.

The four-hour chart shows a possible bearish wedge (not textbook, but its there in spirit) which might take prices back towards 1.2700 is confirmed. The weekly R1 pivot is additionally capping as resistance, so another dip lower is out of the question. But if we will see an opportunity or a hourly close above 1.2820 then it could signal a bullish breakout from its 9-week range and convey

Commodities drift higher after Powell’s testimony:
Commodities were higher overnight after Jerome Powell kept to his transitory inflation script and pledged to stay rates low.

Copper prices rose 1% overnight and are now testing the broken trendline outline in today’s Asian open report, note that the weekly pivot is around 4.85 which leaves a transparent line within the sand for bullish or bearish setups today.

Gold futures rose 0.25% although remains within yesterday’s bearish range, and silver futures are currently 0.65% higher.

Brent futures are probing yesterday’s high although we’d got to see an opportunity above 75.58 (April 2019 high) before assuming resumption of its bullish trend. Prices gave back earlier gains yesterday after OPEC+ talked about raising production.

Two trades to watch FTSE, WTI crude oil

FTSE set to open higher on falling US treasury yields, US stimulus progress. WTI petroleum rises on economic recovery optimism, Iran news
FTSE jumps 1% on falling yields US stimulus progress

FTSE futures are pointing to a stronger start out of the blocks amid an upbeat mood within the market.

The FDA approval of the round Johnson & Johnson covid vaccine and therefore the House of Representatives passing the Biden administration’s $1.9 trillion stimulus package has overshadowed a drop by China’s factory output growth.

UK manufacturing PMI data for February is due later this morning. Expectations are for the ultimate revision to tick higher to 54.9 within the final reading up from 54.1.

Earnings in the week are due from big names like Taylor Wimpey, Persimmon, Fresnillo and Flutter Entertainment.

Where next for the FTSE?

The FTSE bounced off support of its ascending 3 month trendline of Friday and is extending the move higher before the ecu open.

Whilst it trades above its 100 sma on the daily chart remains below the 50 sma and therefore the RSI is additionally in bearish territory. Suggesting a mildly bearish bias. Although the bears would wish to interrupt through the trendline at 6460
Whilst the trendline holds, the bulls will look towards the 50 sma at 6600 with a move beyond here bringing 6700 last week’s high into focus. Past this level the bulls could gain momentum targeting 6810 the yearly high.

On the downside 6460 is offering strong support. this is often not only the trendline support but also a horizontal support which limited losses on several occasions across February.
WTI rises on economic recovery optimism & Iran news

US petroleum prices rose for a 5th straight month in February as investors still cheer the continued economic recovery and therefore the prospect of a vaccine led economic reopening.

On Friday the Baker Hughes total rig count rose by 4 after falling by 1 the previous week.

Attention will address this week’s OPEC+ meeting with chatter surrounding a production hike is increasing.

Iran rejects the EU’s invitation for nuclear deal talks.

Where next for WTI?

WTI trades within an ascending channel dating back to late January. It also trades above its 50 & 20 sma on the daily chart and therefore the RSI is supportive of further gains until it enters overbought territory.
The bulls would wish to push past the Doji candle formation at the 13-month high of $63.71 so as to focus on $65.90 the upper band of the ascending channel & high from 2019.

On the flip side immediate support are often seen at 6150 the lower band of the channel before $60.00 the key psychological level and $59.80 the 20 sma.