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FTSE 100 drops to 3-month low as EUR/USD hovers above support and WTI rises above $100
Technical analysis of the FTSE 100 as it drops to a 3-month low while EUR/USD hovers above support and WTI rises above $100.
Macro update
Asian markets under pressure:
Regional equities declined as investors reduced exposure amid concerns over slowing growth and weaker earnings, with the Nikkei 225 down 3.5% and South Korea falling 5.8%.
Middle East escalation:
The US and Iran exchanged fresh threats over energy infrastructure and the Strait of Hormuz, while Israel signalled the conflict could last weeks, raising fears of prolonged disruption.
Oil volatility persists:
Crude prices remained elevated but volatile, with Brent crude oilnear $113 and up around 55% this month as supply risks outweighed any easing from sanctioned oil flows.
Yields surge:
US 10-year Treasury yields climbed to an eight-month high near 4.42%, as markets shifted from expecting rate cuts to pricing in potential hikes driven by energy-led inflation.
Gold slumps sharply:
Gold dropped more than 5% to its lowest level this year, extending losses as rising rate expectations and a stronger dollar reduced demand for non-yielding assets.
Inflation shock intensifies:
Rising energy costs are feeding through to fuel, shipping and food prices, reinforcing expectations of tighter global policy and adding pressure to growth and corporate outlooks.
FTSE 100 drops to three-month low
The FTSE 100 keeps on rapidly falling, having last week slid through its November to March uptrend line and then its late January to early March lows at 10,079 - 10,049. This area - if revisited at all anytime soon - is expected to act as resistance.
Resistance below this area may be found between the November-to-mid-December highs at 9928 - 9913.
Below the current 9760 March low beckons the 200-day simple moving average (SMA) at 9623.
Short-term outlook:
Bearish while below the breached uptrend line at 10,160.
Medium-term outlook:
Bearish while below the 18 March high at 10,447.
FTSE 100 daily candlestick chart
EUR/USD tries to remain above support
EUR/USD's sharp February to March decline has so far taken it to $1.1411, close to the $1.1392 August 2025 low, a level above which the cross has been trying to find support since last week. While this support zone holds, a recovery towards last week's highs and the 200-day simple moving average (SMA) at $1.1648 - $1.1676 may unfold.
This resistance zone would need to be exceeded for the 19 February low at $1.1742 to be reached.
Short-term outlook:
Bearish while below the 17 - 20 March highs and 200-day SMA at $1.1648 - $1.1676, targeting the $1.1392 August 2025 low.
Medium-term outlook:
Bearish while below the $1.1831 late February high.
EUR/USD daily candlestick chart
WTI back above $100 mark
The escalation in the US-Israel-Iran has once more pushed the price of West Texas Intermediate (WTI) crude oil above the $100 per barrel mark. A rise above the 16 March $102.44 high may put the $105 region back on the map. While last week's low at $91.45 underpins, immediate upside pressure is expected to be maintained. Were this support level to give way, though, the $90 region may be revisited.
Short-term outlook:
Bullish while above the 18 March low at $91.45.
Medium-term outlook:
Bullish while above the 18 March low at $91.45.
WTI daily candlestick chart
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