THE LONDON OPENING 07-07-2022
EUROPEAN STOCKS TRY A CONTINUATION OF THE REBOUND AFTER FED MINUTES AND AHEAD OF ECB MINUTES; INDUSTRIAL PRODUCTION IN GERMANY FALLS MORE THAN EXPECTED
European equities are expected to open higher this morning on the back of a positive Asian session and after the release of the FED meeting minutes. The minutes confirmed a likely 75 bps hike for the next meeting but did not entirely rule out the possibility of a lower 50 bps hike. Meanwhile, industrial production in Germany for May dropped to 0.2 per cent against an expected 0.4 per cent, again signalling the ongoing economic slowdown.
Eyes also turned to the political situation in England, where yesterday saw several resignations of prominent members of PM Boris Johnson’s party following the scandals that have engulfed him in recent times and whose management has been openly and harshly criticised.
Regarding the macroeconomic calendar, investors’ focus today will be mainly on the ECB minutes and US job data (Initial Jobless Claims). At the same time, the Canadian Ivey PMI and the Crude Oil Inventories will also be released later this afternoon.
EURUSD, M15
The EURUSD continued yesterday its decline, reaching a multi-year low around 1.0160. The pair found support and recovered the current weekly POC, which can be considered a positive bias for this morning, even if the medium and long-term trends remain bearish. From a technical point of view, the main intraday support area is between the current weekly POC and the lowest low around the 1.0162 mark. As long as prices remain above these levels, the most likely scenario is a continuation of the rebound to target the LVN and eventually the 1.0275 mark in extension. On the flip side, should prices break the main intraday support area, other drops are expected to target the parity in the medium term.
Main intraday support areas where to look for long trades in case of bullish candlestick pattern or short trades in case of bearish candlestick pattern: 1.0186, 1.0162, 1.0150.
Main intraday resistances areas where to look for short trades in case of bearish candlestick pattern or long trades in case of bullish candlestick pattern: 1.0237, 1.0275.
GOLD, M30
Gold has fallen heavily in recent days, among all the other commodities, to the lowest level since September 2021. It found support around the 1738 mark, an old uncovered daily POC. However, the underlying trend remains bearish, and the fact that prices are trading below the current weekly Value Area can be considered a negative bias for today. From a technical point of view, the main intraday support in the old uncovered POC around the 1738 mark. As long as prices remain above this support, the most likely scenario is a continuation of the rebound to target the current weekly VAL, which is also the main intraday resistance area. On the other hand, in case of prices break the main support downward, the following interesting support area is around the 1724 mark.
Main intraday support areas where to look for long trades in case of bullish candlestick pattern or short trades in case of bearish candlestick pattern: 1738, 1723.
Main intraday resistances areas where to look for short trades in case of bearish candlestick pattern or long trades in case of bullish candlestick pattern: 1754, 1767, 1772.
