FTSE 100, EUR/USD under pressure as WTI back above $100
Technical analysis of the FTSE 100, EUR/USD as they are driven lower by WTI rising back above $100.
Macro update
AI rally pauses: Asian equities weakened as the chip-led rally lost momentum, with South Korea’s KOSPI falling around 3.5% after nearing the 8,000 level, while MSCI’s Asia ex-Japan index slipped 0.6%.
Middle East ceasefire falters: President Trump said the US-Iran ceasefire was “on life support”, with Tehran and Washington still far apart on a peace proposal and the Strait of Hormuz remaining largely shut.
Oil stays elevated: Brent crude traded around $104 a barrel as fragile diplomacy kept supply concerns elevated, with analysts warning renewed escalation could drive prices higher.
US inflation in focus: Markets are awaiting April CPI data, with headline inflation expected to rise to 3.7% year-on-year, increasing the risk of the Federal Reserve keeping rates higher for longer.
Dollar strengthens: The dollar advanced broadly on safe-haven demand and higher rate expectations, pressuring emerging market currencies as the Indonesian rupiah and Indian rupee fell to record lows.
Bond yields climb: Global yields remained under pressure, with Japan’s 10-year yield hitting a 29-year high of 2.54% following a hawkish Bank of Japan readout, while gilts sold off amid UK political uncertainty.
FTSE 100 weighs on key support
The FTSE 100 is putting pressure on its 10,175-to-10,162 recent lows, a slip through which looks probable with the 25 March high at 10,118 being in focus. Further potential support sits between the late January-to-early March lows at 10,096-to-10,049.
Only a bullish reversal and rise above Monday's 10,287 could lead to a bullish trend reversal taking place.
Short-term outlook: bearish while below 10,287
Medium-term outlook: neutral with a bearish bias while below the 6 May high at 10,488
FTSE 100 daily candlestick chart
EUR/USD capped by resistance
EUR/USD is seen coming off its $1.1785-to-$1.1796 May resistance zone with the late April high at $1.1755 being revisited. If fallen through, the March-to-May uptrend line at $1.1722 may be reached as well.
Further down lies strong support between the 200-day simple moving average (SMA) at $1.1682 and the late April-to-early May lows at $1.1677-to-$1.1655.
A rise above last week's $1.17986 high may lead to the April peak at $1.1849 being revisited.
Short-term outlook: neutral with a bearish bias while below the 6 May high at $1.1796
Medium-term outlook: bullish while above the 30 April low at $1.1655, failure there would eye the $1.1648 support level and below
EUR/USD daily candlestick chart
WTI is seen heading back up again
US-Iran ceasefire doubts provoked a rise back above the psychological $100 mark with WTI about to hit the mid-March highs at $100.37-to-$100.48 per barrel. If exceeded, the 16-to-23 March highs at $101.67-to-$102.44 may be reached as well.
Immediate support may be spotted around the 7 May $97.99 high and the around the early April $96.50 low.
Short-term outlook: bullish while above the 6 May $88.66 low
Medium-term outlook: bullish while above the 17 April low at $78.97
WTI daily candlestick chart
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