Two trades to watch: FTSE, EUR/USD

FTSE edges lower with G7 is focus

The FTSE is edging higher at the start of the week after strong gains last week. Recession fears pulled commodity prices lower last the previous week which in turn eased inflation fears, boosting stocks.

Over the weekend, the G7 summit brought Russia and sanctions on Russia back into focus. Whilst the group pledged indefinite support for Ukraine, it also considers a price cap on Russian oil and a ban on Russian gold imports, in an attempt to prevent Russia from funding the war.

The latest updates come as Russia defaults on foreign debt for the first time since 1918.

The outlook for the UK economy remains gloomy as inflation is expected to continue rising and growth stall. Still, that hasn’t stopped the index from tracking other indices higher.

Where next for the FTSE?

The FTSE is rebounding off 6966 the June 20 low. The rise over support at 7157 and the receding bullish bias on the MACD is keeping buyers hopeful of further upside.

Buyers will look for a move over 7235 the May 19 low to expose the 20 sma and June 16 high of 7315, creating a higher high.

Support can be seen at 7157 the May 10 low, with a break below here opening the door to 6966 the June low.

EUR/USD rises on USD weakness

EUR/USD rose last week on USD weakness as recession fears meant investors reassessed the likelihood of the Fed hiking interest rates aggressively.

The pair is rising in early trade as the USD extends its declines after the IMF slashed its economic growth forecast to 2.9% dampening expectations of steep rate hikes from the Fed.

The economic outlook for the eurozone is hardly upbeat, after PMI data and German IFO sentiment data pointed to an economic slowdown.

Today there is no eurozone data, attention is on ECB President Christine Lagarde who is due to speak, and US durable goods orders which are too rose 0.1%.

Where next for the EUR/USD?

EUR/USD rebounded off 1.0360. The retaking of the 1.0475 resistance combined with the bullish crossover on the MACD is keeping buyers optimistic about further upside.

The pair is heading towards resistance at 1.06 the 50 sma and the June 22 high. A break above here open the door to 1.0635 the 5^th May high, opening the door 1.0790 the May.

Support can be seen at 1.0475 last week’s low and 1.0360 the June low.