Two trades to watch: WTI oil, FTSE
Fiona Cincotta October 4, 2021 11:39 AM
Oil looks towards the OPEC+ meeting for a decision on whether output will be ramped up further. The FTSE, along with European bourses weigh up stagflation concerns, energy crisis, Evergrande risks and Merck covid pill news.
WTI oil looks to the OPEC+ decision
Oil is edging just a few ticks lower at the start of the week, stalling around 75.60 as investors look ahead towards the OPEC+ decision.
In the July meeting the group agreed to up output by 400,000 barrels per day. However, the group is deciding whether to increase further as demand recovered fast than expected, pushing Brent to a 3 year high last week.
The surge in natural gas is boosting the appeal of oil which is comparatively a cheaper energy option.Learn more about oil
Where next for WTI oil price?
WTI oil trades has been extending its recovery from the late August low of 61.72. It trades above its ascending trendline and the RSI is supportive of further gains whilst it remains out of overbought territory.
However repeated failures to break above 75.80 could see the sellers extend a move lower towards 74.00 the confluence of the ascending trendline support and July 30 high. It would take a move below 73.00 to negate the near-term uptrend and expose 71.60 Sept 23rd low and August 3rd high.
On the flip side, a push through 75.80 could open the door to 76.64 and fresh recent highs.
FTSE futures pare gains as Evergrande concerns grow
European indices are pointing to a mixed open in what is expected to be a quiet start. Stagflation and the energy crisis are expected to remain a key theme this week.
Concerns over Evergrande defaulting and contagion across the broader Chinese property sector are back to haunt the markets. Reports have emerged that Evergande is in the process of selling 51% of its property management unit which would help ease liquidity issues.
Meanwhile upbeat news on drugs to fight COVID is offering some support. On Friday, Merck announced that molnupiravir a drug in R&D stage could be used as a pill to fight COVID.Learn more about the FTSE
Where next for the FTSE?
The FTSE’s rejection at 7160 the falling trendline resistance sent the index back below its 50 & 100 sma on the daily chart. This along with the bearish RSI is keeping the seller’s hopeful.
It would take a move below 6990 for the bears to gain traction and head towards 6930 the low July 27. A break below here could open the door towards 6880 July 22nd low.
Strong resistance can be seen at 7080 today’s high and the 200sma. A push beyond here could open the door to 7133 high 23 & 27 September and 7160.
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.