Two trades to watch: FTSE looks over bought, EUR/USD tests 1.23
Fiona Cincotta January 7, 2021 3:14 AM
After surging 3.5% yesterday FTSE has moved into overbought territory EUR/USD seen easing lower but uptrend remains
Where next for the FTSE after its stellar run?
• Stocks across the board are pushing higher boosted by the prospect of a Blue wave, shrugging off the storming of Capitol Hill.
• UK steps up its vaccination programme in a race against time to reopen the UK economy
• FTSE set to extend gains after soaring 3.5% in the previous session
EUR/USD pulls back but bullish trend remains
• Germany factory orders smashed forecasts +2.3% MoM vs -1.2% exp.
• Looking ahead EZ retail sales & CPI die at 10:00 GMT
• US Dollar has mixed reactions to Democrat win & Capitol storming. On the one hand it is being boosted by sage haven flows but pressure comes from rising bond yields.
• Jobless claims and covid statistics in focus
EUR/USD trades -0.1% but is still holding above 1.23, after taking three days to find acceptance above the key psychological level.
It trades above its 20 & 50 sma on the 4 hour chart and above its ascending trendline dating back to early November. The RSI is also in bullish territory, trending high but below over bought levels, suggesting more upside.
However, the recent rally stalled at 1.2350 and has rebounded lower. The bullish trend remains in tact above 1.2250.
Immediate support can be seen at 1.23, should the price break through this key level, the next key support is at 1.2260, the confluence of the 50 sma, the ascending trend line and horizontal support from yesterday’s low. Beyond here 1.2150 and 1.20 come into focus.
On the upside immediate resistance is at 1.2350 a break through here could see the bulls target 1.24.
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