THE LONDON OPENING 16-06-2022
FED’S 0.75 RATE HIKE CONFIRMED WITH MORE HIKES TO COME; EU MARKETS OPENED AROUND PARITY AHEAD OF THE BOE
European markets opened this Thursday around parity after Powell at last night’s Fed meeting confirmed the 0.75% rate hike. In the press conference, the president also explained that further rate hikes would follow to contain inflation adequately.
Markets had already discounted this type of increase, as witnessed yesterday by the CME Fedwhatch Tool, which attributed a probability of close to 90% for this scenario; indeed, both major indices and US Dollar remained almost unchanged.
Regarding the macroeconomic calendar, today’s important event is the BoE meeting, with the central bank expected to raise the interest rate by 0.25%; US Building Permits, Initial Jobless Claims and Philadelphia FED manufacturing index are also due to be released this afternoon.
EURUSD, M15
The EURUSD gave an example of the so-called “buy the rumours, sell the news”, as the Dollar lost ground against Euro following yesterday’s FED meeting. The pair regained the current weekly Value Area, but until it does not retrieve the current weekly POC, this movement could not be considered a positive bias for today. From a technical point of view, as long as the pair remains above the current weekly VAL, the most likely scenario is a retracement until upper resistance areas, such as the weekly POC and the current weekly VAH. On the other hand, if prices break the Value Area downward, further drops are expected, with intermediate support around the 1.0370 mark. In case of a breakout of the Value Area upward after the BoE meeting, the nearest resistance area is around 1.0530.
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: 1.0407, 1.0370.
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: 1.0441, 1.0465, 1.0484, 1.0530.
WTI, M15
The WTI reacted slightly stronger than the rest of the instruments to the FED decision, pulling back from its recent heights and retracing by 3.04% yesterday. It is currently trading below the current weekly Value Area, which could be considered a negative bias for today. The trend remains bullish, but this retracement could continue a little bit deeper. From a technical point of view, as long as the pair remains below the Value Area, the most likely scenario is a continuation of the retracement to target the most important support around the area between 111.70 and 111.30, where the current annual VAH is located. On the flip side, if prices regain the Value Area, higher resistance areas as the current weekly POC and eventually the current weekly VAH could be reached.
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: 113.43, 111.67, 111.35.
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: 114.17, 116.30, 118.90.
