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Andreas Zanin
Analysis, Market Analysis | December 19, 2022

US OPENING BELL 19-12-2022

EUROPEAN STOCKS REMAIN POSITIVE AT MID-SESSION; MARKETS ARE ALREADY IN A HOLIDAY MOOD, WITH FEW SIGNIFICANT MOVEMENTS; THE GERMAN IFO BUSINESS CLIMATE INDEX BEAT EXPECTATIONS.

As we had already anticipated, the world stock exchanges are in a pre-holiday mood this week, and it is hard to find significant movements in the various major markets. As far as European equities are concerned, the Dax is ahead by 0.47%, the Cac40 by 0.55% and the Eurostoxx by 0.48%. The major indices, therefore, confirming this morning’s opening, are trying to recover their recent losses, albeit with difficulty.

The dominant underlying theme among investors remains the central banks-recession binomial. The market still does not believe in a FED that could raise rates to 5% throughout the next year. Looking at the yield curve, the market shows yields virtually equal to, if not lower than, the current yields throughout 2023 and is therefore betting on support for the economy from the US bank over the next year. This possible intervention, at the moment by no means a foregone conclusion, could be what will put an end to the bear market. If not, the declines could also be sharp and occur when investors realise that the Fed is serious.

Elsewhere, little movement to report in the commodities market as well, with oil up slightly (+1.11%) on rumours that the Biden administration will begin replenishing the strategic oil reserve.

In the morning, a positive figure also came from Germany, the Ifo business confidence index, which beat expectations, coming in at 88.6 against expectations of 87.4.

As far as the macroeconomic calendar is concerned, no further significant data is expected for the rest of the day.


EURUSD, M15

The EURUSD reached the most critical resistance area around the W-1 VAH and then dropped again to the main support area, between the 1.0612 mark and the W-1 POC. So the sideways trend could continue for the rest of the day, but the very short-term trend is now bearish. From a technical point of view, we could assist in a bullish or bearish stretch if prices break the resistance or the support, respectively. On the upside, the following resistance could be the yearly HVN, while on the downside, the next support could be the W-1 VAL.

Main intraday support areas where to look for long trades in case of a bullish candlestick pattern or short trades in case of a bearish candlestick pattern: 1.0612-1.0588, 1.0545.

Main intraday resistances areas where to look for short trades in case of a bearish candlestick pattern or long trades in case of a bullish candlestick pattern: 1.0650, 1.0730.

S&P500, M30

The S&P500 is little moved today, as the other major indices worldwide. The most significant support area is the 3835 mark. In contrast, the most crucial resistance area is the LVN around the 3878 mark. From a technical point of view, as long as prices remain below the resistance, a drop to the support and to the 3765 mark (an uncovered weekly POC) is the most likely scenario. On the flip side, a breakout of the resistance could lead prices to the area between the W-3 VAL and the W-2 POC.

Main intraday support areas where to look for long trades in case of a bullish candlestick pattern or short trades in case of a bearish candlestick pattern: 3835, 3765.

Main intraday resistances areas where to look for short trades in case of a bearish candlestick pattern or long trades in case of a bullish candlestick pattern: 3878, 3892, 3908-3913.

Key:

POC= Point of Control
VAH= Value Area High
VAL= Value Area Low
LVN= Low Volume Node
HVN= High Volume Node
W-1= last week
W-2= two weeks ago
W-3= three weeks ago
D-1= yesterday
D-2= two days ago
D-3= three days ago

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