THE LONDON OPENING 22-06-2022
EUROPEAN STOCKS OPENED LOWER TODAY AFTER A NEGATIVE ASIAN SESSION; CPI AND PPI GBP DATA RELEASED ABOVE EXPECTATION; WTI POSTED A ONE-MONTH FRESH LOW.
European indices are set for a lower open this morning after a negative Asian session which fails to extend yesterday’s gains of the US session. Investors’ major concerns remained persistent fears about inflation and interest rates, which is why they will focus today on Powell’s two-day testimony to Congress, looking for further clues about the next interest rate hike in July.
The UK inflation rate rose 9.1% (YoY) and the Core CPI (MoM) was released at 0.7% against a forecast of 0.6%. The PPI Input (YoY) was released at 22.1% against the 19.4% expected. All these data remind investors that inflation fight is not over yet.
Elsewhere, the WTI drops to a monthly low, among investors increasing fears about a possible recession in the US, the leading world consumer of oil and the pressure of the Biden administration to push prices down.
Regarding the macroeconomic calendar, Canadian CPI data and Powell’s testimony are the most notable event for today.
EURUSD, M15
The EURUSD failed to hold the main intraday support around the 1.0537 mark during the Asian session and ended its drop finding lower support around the W-1 VAH; it is currently trading below the current weekly Value Area. Both these facts could be considered a negative bias for today. Currently, the main intraday new support zone is between the W-1 VAH and the current weekly VAL. Until prices remain around this area, a pullback to retest the 1.0537 mark and higher resistances, such as the current weekly VAH, is expected. However, the most likely scenario, especially if prices break the W-1 VAH downward, remains a continuation of the drop to target lower support around 1.0470 (uncovered daily POC) and the W-1 POC.
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: 1.0506-1.0490, 1.0470, 1.0446.
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: 1.0537, 1.0554.
WTI, M15
The WTI collapsed in recent days and reached a monthly low this morning. It is trading below the current weekly Value Area, which could be considered a negative bias for today. As mentioned, investor fears of a recession in the US and pressure from the Biden administration to lower crude oil prices weigh on the price. From a technical point of view, the nearest resistance area is around the 104.39 mark. Until prices remain below that area, the most likely scenario is a continuation of the drop to target the current yearly HVN around 102.30 and the 101 mark. On the flip side, if prices break the mentioned resistance upward, a pullback to target the area between the 106.96 mark and the W-1 VAL is expected.
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: 102.30, 101.
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: 104.39, 107.70.
