EUR/USD rises ahead of Lagarde, jobless claims. FTSE struggles on recession fears & despite China reopening.

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EUR/USD is edging higher, building on gains from the previous session. The pair has pushed over 1.05. However, the market mood remains cautious.

The pair has traded within a familiar range as investors are cautious about taking on large positions ahead of next week’s ECB and the Fed rate decisions.

The economic calendar has been quiet in recent sessions, and that is expected to continue today. A speech by ECB President Lagarde will be in focus, with traders watching for comments on the outlook for the eurozone economy and the future path of interest rates.

Her comments will come after eurozone Q3 GDP was upwardly revised to 0.3% yesterday from 0.2%.

Looking ahead, the ECB are widely expected to raise interest rates by 50 basis points after two hikes of 75 bps.

The USD trades mildly under pressure as recession fears rise. US jobless claims will be in focus and are expected to rise to 230k.

Where next for EUR/USD?

EUR/USD has been trending higher over the past 6 weeks. The pair trades within a rising channel dating back to the end of October. The RSI is over 50 and supports further upside while it remains out of the overbought territory.

Buyers need to see a rise over 1.06, the weekly high to extend the bullish trend towards 1.0780 the June high.

On the flipside, sellers will look for a fall below 1.0440 the weekly low and the lower band of the rising channel. A break below here could expose the 100 sma and 200 sma at 1.0390 and 1.0350, respectively.

FTSE struggles on recession fears & despite China reopening

The UK index is set to open lower after booking small gains in the previous session. The market mood is cautious as US recession fears continue to drag on risk sentiment, offsetting optimism surrounding China’s reopening. The rally from the October nadir is showing signs of exhaustion.

Oil sticks have been a drag on the index, as oil look set to lose just shy of 10% this week on recession fear.

Looming central bank decisions could keep moves muted this week. The BoE is widely expected to raise interest rates by 50 basis points next Thursday as it continues to fight double-digit inflation.

Where next for the FTSE?

The FTSE ran into resistance at 7610 and has rebounded lower, finding support at 7640. The price has fallen below the steep rising trendline dating back to mid-October and below the falling trend line dating back to early April. However, it remains firmly above the 50, 100 & 200 sma. The RSI remains over 50, suggesting there could be more upside to come.

Buyers will look for a rise above 7520, falling trendline to expose 7620 the weekly high. A rise above here exposes the 7660 the late April high.

On the flipside, should sellers successfully defend the falling trendline, support can be seen at 7460 the weekly low. A break below here opens the door to support at 7420 the mid-November high and 7330 the 200sma.

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