Two Trades To Watch: EUR/GBP, WTI Oil

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EUR/GBP struggles for direction post-UK retail sales, EZ CPI final next

UK retail sales ex-fuel unexpectedly declined in August. Sales dropped -0.9% YoY, down from a 1.8% rise in July. Analysts had been expecting a 2.5% increase.

Monthly retail sales ex-fuel fell -1.2% in August after falling -2.4% in July.

Looking ahead Eurozone CPI data is due, the final reading for August. Given that this is a final reading it is not expected to have a huge impact on the Euro unless the print is significantly different from the initial 3% YoY figure.

Where next for EUR/GBP?

EURGBP is holding steady after two straight days of decline. The move below the 50 SMA on the daily chart combined with a bearish RSI is keeping sellers optimistic of further downside. However, the Doji candles suggest traders are indecisive as to the next move.

Any move lower could run into support in the 0.8511 – 0.8503 zone, with a meaning break here bringing 0.845 low August 16 into focus.

Any meaningful recovery will need to retake the 50 sma at 0.8544. A push above this level could see the near-term bias change in favor of the buyers, bringing the 100 sma at 0.8572 and 0.8585 the falling trendline resistance into focus.

Oil ticks lower but set for strong weekly gains -Baker Hughes rig count in focus

Oil is ticking mildly lower on Friday but is still set for weekly gains in the region of 3.8%. This would mark the fourth straight week of gains with oil prices up over almost 15% from their August 23 low.

This week concerns over the slow return of supply in the US after hurricane Ida resulting in a much larger than expected drawdown in inventories has boosted the price, in addition to the energy crisis in Europe.

Supply is now returning which explains the slight dip in prices in early trade. However, more broadly speaking demand is expected to continue outstripping demand as per the IEA& OPEC reports

Baker Hughes rig count data will be in focus after the number of US rigs rose last week

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