Two trades to watch: FTSE, Gold
Fiona Cincotta May 17, 2021 7:32 AM
FTSE edges lower, UK eases lockdown restrictions further, Chinese retail sales miss forecasts. Gold moves above 200 day moving average, Fed speakers in focus.
Gold crosses above key resistance
Gold is trading above a 3 month high, above the $1850 level
US treasury yields fall for a third straight day after weak US retail sales data and as the Fed re-iterates its dovish message boosting the precious metal.
Geopolitical headlines support gold in addition to concerns over covid resurgence in Asia-Pacific.
Chinese buyers appear to be returning to the market after regulators increased import quotas to meet domestic demand.
However, the pick up ion the US Dollar could add pressure.
Federal Reserve's Raphael Bostic to speak later.
Where next for Gold price?
After completing a double bottom chart pattern in March/ April gold is extending gains within an ascending channel.
Gold has also crossed over its 200 day moving average as well as its descending trendline dating back to early August in a bullish signal. The RSI suggests that there could be more upside on the cards until it enters overbought territory.
Immediate support can be seen at $1865 the upper channel of the ascending channel, ahead of $1875 the February high.
On the down side $1845 is an important level, the confluence of the descending trendline and 200 day ma. Beyond there $1815 the level taken to complete the double bottom and swing high Feb 25.
FTSE edges lower, UK eases lockdown restrictions further
The FTSE is trading lower at the start of the new week, following a soft handover from Asia.
Indices are not proving able to take advantage of the stronger finish on Wall Street after the weaker than expected retail sales figures.
Overnight Chinese industrial production came in line with estimates, helping commodities re-find their footing. However, weak retail sales have hit sentiment.
Today, the UK takes another step along the re-opening path, with further restrictions being eased.
Where next for the FTSE?
The FTSE sold off in the previous week shedding -1.4%.
After briefly slipping through the multi-month ascending trendline and the 50 sma on the daily chart the price bounced back, confirming the bullish trend.
Whilst the FTSE can hold above 7035 resistance turned support then a move higher towards 7100 could be on the cards, before 7170 become the target.
However, failure to hold this level could see 6950 horizontal support tested. A move below here could negate the near term uptrend prompting a deeper selloff.
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