European Open: Brent breaks $77, FTSE on Track for Bullish Week

Oil prices remained firm overnight, which saw WTI and brent touch new multi-week high. Yet with key resistance overhead, we may even see a retracement before the weekend.
Equity markets were mixed overnight which saw China’s benchmark indices post minor gains, and Japan’s markets rise around 2% as they played catch up after yesterday’s holiday. The ASX 200 was a weak performer and currently trades around -0.4% lower because it did not retest yesterday’s high.

The FTSE has been twiddling with an equivalent key levels since it broke beneath trend support on the 7th September. The rebound from the July’s low paused at 7,000, broke higher subsequent day and tested 7090, then yesterday’s breakout stopped just shy of touching the 7138.35 price that broken on the 7th September (then closed back below 7090 with a bearish pinbar). So these levels remain important heading into the weekend. note that it’s on target for a bullish engulfing / outside week which found support at the 200 and 50-week eMA’s, which paints an upside bias over the approaching week/s if we see a robust close today. it’s going to even have another crack at breaking those cycle highs. As for today, 7060 ad 7030 are key support levels for bulls to defend. And without a fresh catalyst it’s going to struggle to post another solid gain today.It was very narrow ranges for currency pairs overnight as traders across Asia have seemingly called it every week . Japan’s annual CPI read stopped deflating for the primary time since June 2020, all because of rising energy costs. At 0%, inflation remains an extended way from the BOJ’s 2% goal, but we’re sure they’re going to take it.

Germany’s IFO business report is released at 09:00 BST. EUR/USD is coiling up slightly below yesterday’s bullish engulfing high, so a solid report could see it break above its current range and to new highs.

In a similar fashion, GBP/CHF is additionally consolidating during a potential continuation pattern on the hourly chart where an opportunity above 1.2708 breaks the cycle high and places price back above the weekly S1 pivot. Key support (or potential bearish target) remains at 1.2650.

USD/JPY has continued higher with little within the way of a pullback, because it tracks global yields. 110.45 may be a key resistance level for bulls to overcome this session.A strong trend has been developing on brent futures four-hour chart. A series of upper lows has formed since its August low and bullish momentum has increased leading into the July. That, along side bullish fundamentals favours an eventual break above 78.00. However, it’s possible we may even see prices initially retrace from that level because it may be a key swing high, we’re approaching the weekend (so some trades will want to face up before the weekend) and therefore the weekly R2 pivot is additionally within the area. Should the US dollar strengthen it likely increases the chances of a countertrend move before the weekend, but we might still have an interest in bullish setups above the 75.63 – 76.55 zone in anticipation of an opportunity afterward . Alternatively, bulls could await an opportunity above $78 and see if it turns resistance into support.

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