Two trades to watch: FTSE, WTI crude oil

FTSE set to open higher on falling US treasury yields, US stimulus progress. WTI crude oil rises on economic recovery optimism, Iran news

Charts (4)

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 in the market. 

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

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

Earnings this week are due from big names such as 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 ahead of the European open. 

Whilst it trades above its 100 sma on the daily chart remains below the 50 sma and the RSI is also in bearish territory. Suggesting a mildly bearish bias. Although the bears would need to break 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 not only the trendline support but also a horizontal support which limited losses on several occasions across February.

A break through here would see the bears target the yearly low of 6300.
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WTI rises on economic recovery optimism & Iran news

US Crude oil prices rose for a 5th straight month in February as investors continue to cheer the ongoing economic recovery and 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 turn to 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 the RSI is supportive of further gains until it enters overbought territory.
The bulls would need to push past the Doji candle formation at the 13-month high of $63.71 in order to target $65.90 the upper band of the ascending channel & high from 2019.

On the flip side immediate support can be seen at 6150 the lower band of the channel ahead of $60.00 the key psychological level and $59.80 the 20 sma.

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