FTSE Falls as Risk sentiment Dives – Netflix Plunges

FTSE => The stock trades at a 5-month low

EUR/USD  => The euro rises for a second straight day

Gold => The commodity eases from a 2-month high

FTSE Falls in Risk-off Trade

The FTSE closed a few pips lower yesterday and is expected to start lower today as risk sentiment sours. The index is on track to end the week around 0.5% lower, marking after four straight weeks of gains. Whilst the index has been supported by oil majors and resource stocks as oil and metals gained earlier in the week, global risk sentiment has also taken a hit on fears of aggressive monetary policy tightening by the Fed, in the second part of the week. Today UK retail sales are in focus. Expectations are that retail sales fell -0.6% MoM in December as Omicron cases surged, after rising 1.4% in November.

UK Retail sales MoM Dec. Expected: -0.6 (2%) Previous: 1.4%

FTSE daily chart analysis

What’s Next for FTSE?

The FTSE formed a rising wedge reversal pattern, breaking below the rising trendline support on Thursday, which combined with the bearish crossover on the MACD suggests that there could be more downside to come. Sellers could look to break below 7460 the December high bringing 7340 the 50 sma into target. Buyers will be looking for a move back over 7570 in order to target the post-pandemic high of 7638. 

Netflix Tumbles on Weak Guidance

Netflix Q4 results beat analysts forecast. However weaker guidance spooked the market sending the share price sharply lower in after-hours trade. The streaming giant reported EPS of $1.33 on revenue of $7.71 billion. Netflix also added 8.2 million new subscribers below the 8.5 million expected. After a strong showing in the final quarter of 2021, Netflix warned that it is expecting to add just 2.5 million new subscribers in Q1 2022. Netflix share price fell trades -20% pre-market open.

EUR/USD Edges Higher After Dovish ECB

EUR/USD fell 0.25% yesterday, weighed down the minutes from the latest ECB meeting and a dovish sounding ECB President Christine Lagarde. The minutes from the ECB meeting saw policymakers stick to the familiar script, that high inflation will ease over the coming year. Christine Lagarde re-iterated those comments in a speech, even with Eurozone CPI inflation at 5% and German PPI inflation at a record high. ECB members see inflation falling to the ECB’s 2% target by the end of 2022. Today, the euro is recovering some losses, there is no high impacting data due to be released from the Eurozone. Instead, several ECB officials are due to speak, including Christine Lagarde. 

German PPI inflation

Eurozone Inflation YoY Dec 

Actual: 24.2 (2%)

Actual: 5% (0.1%)

Previous: 19.2%

Previous: 4.9%

Support can be found at 1.1273 (rising trendline support) and 1.1228 (December 15 low).           

Resistance can be seen at 1.1386 (December high) and 1.1483 (100 sma).


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