We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
Oil - US Crude
Bearish
Bitcoin
Mixed
More View more
Real Time News
  • Have central banks run out of ammo? And where are central banks headed? Find out from Cross-asset class trader, @JohnNetto only on Trading Global Markets Decoded #podcast with @MartinSEssex here: https://t.co/Twr44cZ1GB https://t.co/iFowV6YBBj
  • LIVE IN 30 MIN: Join Currency Strategist @PaulRobinsonFX as he runs through his favorite charts and potential set-ups for the week ahead in the FX and CFDs market. Register here: https://www.dailyfx.com/webinars/108721147?CHID=9&QPID=917720
  • AUD/USD Technical Analysis: Choppy Aussie Dollar Still Aims Lower - https://www.dailyfx.com/forex/technical/home/analysis/aud-usd/2019/12/06/AUDUSD-Technical-Analysis-Choppy-Aussie-Dollar-Still-Aims-Lower.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #AUDUSD #technicalanalysis https://t.co/uE75UEjmIj
  • Join @PaulRobinsonFX 's #webinar at 5:30 AM ET/10:30 AM GMT as he goes over London #FX & #CFD charts for the next week. Register here: https://t.co/CoMkMA0pdF https://t.co/w52tn0x11T
  • The $JPY has, at last, made some clear headway against the US Dollar, but its bulls have yet to nail down their channel break. Get your market update from @DavidCottleFX here:https://t.co/ADgQ3idxYJ https://t.co/nZzXEfImw6
  • Have you joined @DailyFX @facebook group yet? Discuss your #forex strategies and brush up on your skills with us here: https://t.co/jtY1G7g8yx https://t.co/M7hQiSBOQy
  • CHF Switzerland Nov Foreign Currency Reserves Actual: 782.9b Previous: 779.1b
  • The $NZD short sharply higher against its US counterpart but technical positioning suggests the long-term downtrend remains firmly intact. Get your market update from @IlyaSpivak here:https://t.co/D616tdcZdp https://t.co/4xBdgosNzM
  • Join our analysts for live, interactive coverage of all major, market-moving economic data at DailyFX webinars. https://www.dailyfx.com/webinars?re-author=Cottle?utm_source=Twitter&utm_medium=Cottle&utm_campaign=twr
  • #Crudeoil prices edged back a little as #OPEC agreed to more production cuts and the market awaited ratification. #Gold was steady as US #nonfarmpayroll numbers approached. https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2019/12/06/Crude-Oil-Prices-Slip-as-Markets-Look-to-OPEC-US-Payrolls-Data.html?utm_source=Twitter&utm_medium=Cottle&utm_campaign=twr
FTSE 100 Weekly Look Ahead: GBP and FTSE Correlation Breaking Down

FTSE 100 Weekly Look Ahead: GBP and FTSE Correlation Breaking Down

2018-08-13 07:00:00
Justin McQueen, Analyst
Share:

FTSE 100 Analysis and News

  • GBP Decline May Begin to Weigh on the FTSE 100
  • UK Data in Focus with Wages (Tue), Inflation (Wed) and Retail Sales (Thu) Scheduled
  • Geopolitical Tensions Presents Risk for FTSE

See our Q3 forecasts to learn what will drive FX the through the quarter.

GBP Decline May Begin to Weigh on the FTSE 100

What has been evident in recent times is that when the Pound drops, the FTSE 100 typically moves in the opposite direction given that roughly 70% of the companies within the index generates revenue from overseas. As such, the fall in GBP tends to support dollar-earning multinational companies. However, the negative correlation has seemingly broken down with the Bank of England recently hiking rates while inflation continues to remain above the central banks 2% target. Consequently, the Pound and the FTSE 100 may move into positive correlation for the first time since December 2016, which would not spell good news for the FTSE 100 as the Pound falls to its lowest level against the greenback since July 2017.

FTSE 100 Weekly Look Ahead: GBP and FTSE Correlation Breaking Down

Source: Thomson Reuters

UK Data in Focus

Focus this week will be on the plethora of economics data points out of the UK, with the jobs report released on Tuesday, while inflation and retail sales are scheduled for Wednesday and Thursday. Much of the markets attention will be placed on the inflation print with risks potentially skewed to the upside given the fall in the Pound, potentially providing a boost to inflation, resulting in a firmer Sterling.

Geopolitical Tensions Presents Risk for FTSE

Geopolitical tensions are on the rise with both Turkish and Russian diplomatic ties with the US deteriorating. Consequently, this has placed pressure on global equities, most notably from concerns out of Turkey after reports from the FT that banks could be exposed to the fall in the Turkish Lira, which is down over 80% YTD. Unless the Turkish authorities look to address the fall in the Lira, weakening sentiment may persist, which in turn could see equities extend lower.

FTSE 100 Price Chart: Daily Time Frame (February-August 2018)

FTSE 100 Weekly Look Ahead: GBP and FTSE Correlation Breaking Down

Chart by IG

A cluster of DMAs have underpinned the FTSE 100 for now, eyes will be on for a break lower, which would open up a potential move in for the 7600 level. On the topside however, near term targets are at 7700 before 7750

KEY TRADING RESOURCES:

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.