US OPENING BELL 28-06-2022
EUROPEAN STOCKS EXTEND GAINS AHEAD OF US SESSION AFTER LAGARDE’S SPEECH
After Lagarde’s speech at the Sintra Forum, European stocks extend gains ahead of the US session. The ECB President repeated the commitment of the central bank to raise interest rates in the following meetings starting from a 25 bps hike in July. The president also explained that further interest rate hikes will follow until the inflation in the Eurozone comes back close to the 2% target.
Lagarde also explained how the ECB decided to mandate the relevant committees to complete the design of a new instrument (the so-called anti-fragmentation tool), which will contain sufficient safeguards to preserve the impetus of Member States toward a sound fiscal policy. She also added that the ECB will use flexibility in reinvesting redemptions coming due under the pandemic emergency purchase programme (PEPP) to preserve the functioning of the monetary policy transmission mechanism. In other words, those redemptions can, as appropriate, be invested within the Eurosystem in bond markets of jurisdictions where orderly transmission is at risk.
After the speech, the Italian bond yield raised by 1.7% against a rise by 6% in the German bund.
EURUSD, M15
The situation of the EURUSD ahead of the US cash opening is quite clear. The pair is ranging between the two main intraday areas: the key resistance area between the annual LVN and the current weekly VAH and the key support area between the W-1 VAH and the current weekly VAL. The trading range is very narrow, and often in these cases, a quick move is expected once the breakout occurs. Moreover, this morning the pair was trading above the current weekly value area, while it is now below it, which can be considered a bearish bias. From a technical point of view, it would be important to monitor these two areas. Should prices break the support area to the downside, the EURUSD could fall to the next support area: the W-1 POC and possibly the W-1 VAL in extension. On the other hand, should prices break upward resistance, the most likely scenario would become a continuation of the recent rises to target the area around 1.0634.
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: 1.0562, 1.0538, 1.0509.
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: 1.0586, 1.0594, 1.0614, 1.0634.
S&P500, M30
The S&P 500 is in a trading range between 3900 and 3940, and it is coming back into the current weekly Value Area after it tried to break it upside this morning. If prices will not rise further, trying to stretch until the 3967 mark, there is a probability that this trading range will result from a distribution phase. From a technical point of view, the most important intraday support area is around the 3878 mark; below that area is the highlighted low-volume area that could be crossed quickly. On the other hand, the most relevant intraday resistance area is around the 3967 mark; should prices break that area upward, they will find another low-volume area that could also be crossed quickly.
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: 3898, 3878, 3855.
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: 3922, 3967.
