Two Trades To Watch: EUR/GBP, FTSE - Thursday, Mar. 11

EUR/GBP looks to ECB. FTSE points higher after strong handover.


EUR/GBP looks to ECB

EUR/GBP trades lower for the 7th straight session as investors look ahead to the ECB rate announcement (FXB,FXE).

No change in rates is expected, instead investors will be watching to see how the ECB looks to deal with rising bond yields.

Where next for EUR/GBP?

EUR/GBP trades lower on the day at session lows of 0.8555 heading to wards the European open. 

The pair refreshed its monthly low but remains just above February’s 13 month nadir of 0.8539.

EUR/GBP trades below its ascending trendline dating back to the start of the year, and below its 20and 50 sma in a bearish chart.

The RSI is on overbought territory so some consolidation or a move higher could be on tye cards before further selling kicks in.

Immediate resistance can be seen at 0.8590the descending trend line. A move above here could bring 0.8630 the 20 sma into play before the bulls look to target 0.87. A move above this level could negate the near term bearish trend.

On the flip side, bears will need to break down the 0.8539 February’s 13 month low before bears set their sights on 0.85 and 0.84 round numbers and support at Jan 31, 2020.

FTSE rises after strong handover from Wall Street

European indices are heading higher after an upbeat session on Wall Street which saw the Dow Jones reach a fresh all time high.

Weak than expected US core CPI helped ease concerns over inflation.

The rotation out of growth into value continues which could beneficial for the FTSE which is dominant in financial and energy stocks.

Where next for the FTSE?

The FTSE has started to show some signs of life. The index trades above its 20 & 50 sma on the 4 hour chart it also trades above an ascending trend line dating back to the start of the month. 

The 20 sma crossed above the 50 sma last week in a bullish signal and the RSI is supportive of further upside.

The bulls need to push over resistance at 6750 which is proving to be a tough nut to crack having capped gains several times over the last week. This price is being tested at the moment.

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