Two trades to watch: FTSE, Gold
Fiona Cincotta December 10, 2021 3:12 AM
FTSE falls as economic growth stalls. Gold edges lower ahead of US CPI data.
FTSE falls as economic growth stalls
The FTSE is moving lower after a weak handover from Wall Street and Asia.
UK GDP MoM in October came in at 0.1%, well down from 0.6% in September and below forecasts of 0.4% growth.
Industrial production and manufacturing grew by less than expected, at 1.4% and 1.3% respectively
Risk off dominates amid renewed concerns over COVID as growth showed signs of slowing even before the tighter COVID restrictions were brought in, which doesn’t bode well for the coming winter months.Learn more about the FTSE
Where next for the FTSE?
The FTSE ran into resistance at 7380 on it runup from the late November low. The price is easing lower. However, it remains above the rising trending line and the 50 & 200 sma on the 4-hour chart.
The MACD points to further losses, however it would take a move below 7200 the 50 sma to negate the nest term up trend and move below 6971 for sellers to gain traction.
With the uptrend still intact this still looks like a buy the dips set up, resistance at 7380 ahead of 7400 the post pandemic high.
Gold edges lower ahead of US CPI data
Gold is edging mildly lower, as the US Dollar strengthens, ahead of US CPI inflation data. Expectations are for CPI to jump to 6.8%, its highest level in almost 40 years. Core CPI is expected to rise to 4.9%, it is already at a 30 year high.
With inflation above the Fed’s target 2% and accelerating, another elevated reading could prompt the Fed to accelerate the tapering of its bond purchases at the Fed meeting next week and ultimately raise interest rates sooner. This would be bad news for non-yielding gold.Learn more about trading Gold
Where next for gold prices?
Gold extended gains from its December low, running into resistance at 1793. The price has been falling lower since, break below its week old rising trendline and below its 50 sma on the 4 hour chart.
The RSI is support of further losses whilst it remains out of oversold territory.
Sellers will look for a move below support at 1772 the weekly low, to open the door towards 1761/59 the December/November low.
Any recovery needs to retake the 50 sma at 1780 and the rising trendline resistance at 1785. It would take a move over 1793 for bulls to gain traction.
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
- Open a Forex.com account, or log-in if you’re already a customer.
- Search for the market you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.