Credit: This article is based on insights by Jani Ziedins, originally published on Investing.com.
Title: EUR/USD and FTSE 100 Technical Outlook: Key Levels and Trade Setups to Watch
The current global market environment is shaped by an intricate balance of economic uncertainty, inflationary pressure, and evolving monetary policy. This context plays a pivotal role in shaping the price actions and trade opportunities within the currency and equity markets. Two of the most closely watched instruments—the EUR/USD currency pair and the FTSE 100 index—are exhibiting technical setups that offer significant trading potential.
In this article, we analyze the key technical levels, recent price behaviors, and potential trade setups for these two instruments based on the analysis provided by Jani Ziedins from Investing.com. Both markets are moving within technical frameworks that traders can utilize for strategic entry and exit points.
EUR/USD Technical Outlook
The EUR/USD pair has been consolidating amid the changing interest rate expectations in both the eurozone and the United States. Despite recent corrections, the pair remains in a broader downtrend that has been in place since mid-2023. A careful evaluation of the most recent price movements suggests potential trade setups in both directions, depending on how the price responds to key resistance and support levels.
Recent Price Action:
– The EUR/USD retraced from the recent short-term top near 1.1020
– Following this rejection, the pair fell below key moving averages, which acted as dynamic support zones
– Bearish momentum has gathered strength as the U.S. dollar regains a bullish stance amid hawkish Fed signals
Key Technical Levels to Watch:
– Resistance: 1.0900 – A psychological and technical barrier; breaking above would signal respite for bulls
– Support: 1.0750 – A short-term floor that coincides with recent swing lows
– Intermediate Support: 1.0800 – Important intra-day level that has seen repeated tests in recent sessions
Trade Setup #1: EUR/USD Short Opportunity
Given the macro backdrop and recent technical breakdowns, a short position becomes favorable under the following conditions:
– Entry Trigger: A bounce below the 1.0800 resistance-confirmed level
– Target #1: 1.0750 – Previous support level that aligns with oversold territory on relative strength index (RSI)
– Target #2: 1.0650 – Deeper retracement that aligns with longer-term support
– Stop Loss: Close above 1.0825 – This marks a technical invalidation of the short thesis
Rationale:
– The U.S. Federal Reserve’s hawkish tone supports a stronger dollar
– European macro data remains weaker than expected, with inflation still not declining rapidly
– RSI and MACD indicators point to weakening bullish momentum
Alternative Scenario: Bull Case
If broad risk sentiment turns optimistic or U.S. inflation surprises to the downside, a rapid EUR/USD breakout could occur.
– Bullish Confirmation: Clean break and hold above 1.0900 resistance
– Potential Target: 1.0950, followed by 1.1020 (previous zone of seller control)
– Stop Loss under Bull Case: Below 1.0800
Lower probability, but must be taken seriously in the event of dovish Fed commentary or economic softness in the United States.
FTSE 100 Index Technical Analysis
The FTSE 100 index, which tracks the top 100 UK-listed blue-chip companies, has exhibited strong relative strength, even as global equity markets have shown mixed performances. The UK index has recently flirted with all-time high territory, reflecting optimism over the performance of key sectors, including banking and energy.
Recent Price Behavior:
– The index rallied from the 7,900 level and is trading near a multi-year high, just below the 8,050 mark
– Momentum indicators remain bullish, although mildly overbought
– Price remains above key moving averages, supporting the bullish case
Read more on EUR/USD trading.