FTSE rises on renewed hopes of a diplomatic solution to Russia. EUR/USD rises in risk-on trade, PMIs.
FTSE rises on renewed hopes of a diplomatic solution to Russia
The FTSE also with this European peer is heading for a higher open, boosted by hopes of a diplomatic solution to the Russia, Ukraine conflict. Although caution remains.
Russia’s Putin & US President Biden have agreed to a French proposed summit in an attempt to find a diplomatic solution.
Risk sentiment and the stocks markets are likely to continue whipsawing from headline to headline.
UK PMIs are due to be released. The services PMI is expected to rebound to 55.5 up from 54.1 in January as Omicron fears waned.
The US is closed for a public holiday.
Where next for the FTSE?
The FTSE rebounded off the 50 sma at 7450 and continues to trade within a familiar range, capped on the upside by 7630 and on the lower side by 7470.
The RSI, which has been neutral is attempting to push over 50, in a mildly bullish sign and the index remains above the multi-month rising trendline. However, buyers would really be looking for a move over 7630 to bring 7690 into focus and fresh post-pandemic highs.
On the flip side, sellers could look for a move below 7470 the 50 sma, and December high to bring 7400 into play, the November high.
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EUR/USD rises in risk-on trade, PMIs
EUR/USD recovers from losses last week in hopes of a Russia, Ukraine war being avoided. Putin & Biden could meet in an attempt to resolve the conflict.
German PPI unexpectedly rose 25% YoY in January, up from 24.2% in December. The data indicates that consumer prices are likely to continue rising.
Eurozone PMIs are expected to show a recovery in business activity as the spread of Omicron slowed. The composite PMI is expected to rise to 52.7, up from 52.3.
The safe-haven US dollar is out of favor as risk sentiment improves. Liquidity could be thin given the US public holiday.
Where next for the EUR/USD?
EUR/USD has risen above its 100 sma on the 4-hour chart as it recovers from an overnight low of 1.1313. The RSI has moved into bullish territory, indicating a bullish shift.
Buyers will look for a meaningful move above the 50 sma at 1.3723 to bring 1.14 into play the February 16 high. A move above here opens the doors to 1.1490 the February high.
Sellers will look for a move below the 100 sma at 1.1345, opening the door to 1.1310 and 1.1280. A move below here could spark a larger sell-off.
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