Two Trades To Watch: FTSE And USD/CAD

FTSE rises as risk appetite rises, UK retail sales jump. USD/CAD falls despite oil dropping, CAD retail sales due.

FTSE rises as risk appetite rises, UK retail sales jump

The FTSE along with its European peers is on the rise, recouping yesterday’s losses.

News that US Secretary of State, Blinken, and Russia’s foreign minister, Lavrov, have agreed to meet next week has cooled fears of an invasion, at least for this week.

UK retail sales rose 1.9% MoM in January, up from December’s disastrous -3.7% drop and well ahead of the 1% forecast.

Banks could get a boost from NatWest Swinging into £4 billion profit. Falling oil prices could pressurize oil majors.

Where next for the FTSE?

The FTSE trades within a rising channel since late November. The price ran into resistance at 7682, the post-pandemic high, before edging lower, and is now consolidating around 7550. The bearish divergence on the RSI suggests that momentum is running out of steam.

Support can be seen at 7475/60 the 100 sma and lower band of the rising channel, a breakthrough here could open the door to 7410 the November high. A move below here would negate the near-term uptrend.

On the upside, buyers could look for a move over 7610, the early February high to head towards 7680, and fresh post-pandemic highs.

(Click on image to enlarge)

USD/CAD falls despite oil dropping, CAD retail sales due

USDCAD is heading lower paring gains from yesterday even as the price of oil continues to decline.

Oil, Canada’s main export dropped 2% and is down a further 0.9% as the US – Iran talks to revive the nuclear deal are progressing well.

The pair is falling as risk sentiment in the market improves, hurting demand for the safe-haven US Dollar.

Looking ahead Canadian ADP employment is expected to rise by 19.2k in January and Canadian retail sales are expected to fall -2.1% as Omicron deterred shoppers.