Major European stocks are down this Thursday before the US opening bell. Currently, the Dax is down 0.20%, the Cac40 0.05% and the Eurostoxx 0.18%. The only positive stock exchange is the London one, with the FTSE100 advancing 0.37%.
Market sentiment remains fragile, and after yesterday’s strong performance in the equity segment led by much better-than-expected earnings for Nike and FedEx, US futures are trading slightly lower today. Lower than-expected GDP data came in from the UK this morning, at 1.9% year-on-year versus 2.4% expected and -0.3% quarter-on-quarter versus -0.2% expected. This negative figure, as has often been the case recently, drove the London stock market higher. Investors read it as an indication that the BOE will soon be forced to slow down on raising rates (or perhaps even reverse monetary policy), thereby supporting the economy.
The big expectation then will be for this afternoon’s US GDP and initial jobless claims data, which will indicate whether the US labour market remains as robust as last reported or whether the effect of the Fed’s tightening monetary policies will begin to be felt. The most critical data, however, the actual market mover of the week, will be the Core PCE Price Index so dear to the FED, from which investors will try to understand how close we are to the central bank’s pivot.
Elsewhere, WTI oil reached its highest level since 5 December after yesterday’s positive inventory data, which saw a reduction of around 6 million barrels, confirming strong demand from the world’s largest crude consumer.
The EURUSD horizontal channel continues to work well. Trying to find selling opportunities around the main intraday resistance area (the W-1 VAH) and buying opportunities around the most significant support area (between the 1.0612 mark and the W-1 POC) is a strategy that could have generated good profits. From a technical standpoint, 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.
The S&P500 rose strongly yesterday and reached the W-2 WAL. It trades around the most significant intraday support area, the 3869 mark. From a technical point of view, if prices break the support downward and consolidate below it, a drop toward the 3850 mark and to the LVN around the 3819 mark is the most likely scenario. On the flip side, if the index can maintain the support, an attempt to stretch above higher resistances (W-2 VAL, W-2 POC, W-3 VAL) is expected.
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: 3869, 3835, 3819.
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: 3892, 3908-3913.
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