THE LONDON OPENING 23-06-2022
EUROPEAN STOCKS OPENED AROUND PARITY AFTER A SLIGHTLY POSITIVE ASIAN SESSION; US EQUITIES LOWERED AFTER THE FIRST DAY OF POWELL’S SPEECH IN ITS TWO-DAY TESTIMONY TO CONGRESS
The market sentiment remains fragile this Thursday, with all the major European indices opening around parity after a slightly positive Asian session; China A50 is up by 1.35%, Nikkey by 0.08% and ASX200 by 0.31%.
In the US, the equity market started yesterday’s session with positive momentum but turned down after Powell’s speech to Congress. The Chairman explained that the FED is “strongly committed ” to fighting inflation and that even if a recession is not 100% avoidable, it is not the outcome the FED would like. He also added that any specific interest rate hike is not out of the table (even a 100 bps in the July meeting).
European and British PMIs data will be released this morning regarding the macroeconomic calendar. US Initial Jobless Claims and Crude Oil Inventories will be released later this afternoon when investors focus mainly on the second Powell’s testimony to Congress.
EURUSD, M15
The EURUSD rose strongly yesterday before Powell’s speech, reaching the yearly LVN again around 1.0580, where sellers came into the market, and prices found resistance. As for today, this is the main intraday resistance area, between the yearly LVN and the current weekly VAH. From a technical point of view, until prices remain below that area, the pair could start to drop again and successfully target lower support areas: the weakest one is around 1.0537 and the strongest between the current weekly VAH and the W-1 VAH. On the flip side, if prices manage to break the main intraday resistance area upward, further rises are expected until the 1.0614 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: 1.0537, 1.0506, 1.0490.
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: 1.0566-1.0580, 1.0614.
WTI, M30
Ahead of the US Crude Oil Inventories, which are due to be released this afternoon, and waiting to understand the Biden administration’s plans to lower the price of crude oil, the WTI continue to post lower lows and lower highs, highlighting the current short-term downtrend. It is currently fighting to regain last week’s Value Area, but it is still below it, and this could be considered a negative bias for the day. From a technical point of view, a pullback is expected after more than a 17% decline in 7 days, but prices should come back into the weekly Value Area, gaining some momentum. The main intraday resistance area is between the current weekly VAL and the 104.75 mark. As long as prices remain below that area, the most likely scenario is a continuation of the drop to target lower support around 102.30 and 101. On the other hand, if prices manage to regain the weekly Value Area and consolidate above it, a deeper pullback until the current weekly LVN and eventually to the current weekly POC 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: 102.3, 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: 104.30-104.75, 106.5.
