THE LONDON OPENING 10-06-2022
EUROPEAN STOCKS EDGE LOWER AFTER ECB MEETING; INVESTORS WAITING FOR US CPI DATA
European stocks opened lower this morning following yesterday’s negative US session due to investors’ reaction to the ECB meeting. President Lagarde confirmed to leave the interest rate unchanged and terminate the Asset Purchase Programme as expected.
The US Dollar seems set for new highs among its peers as investors were expecting a few more explicit references to a higher rate hike than so far stated in the ECB’s forward guidance.
Regarding the macroeconomic calendar, US CPI data are due to be released this afternoon, and Lagarde’s speech is also scheduled for today.
EURUSD, M15
The dollar fell sharply after the ECB’s statements as investors found no further signs of a continuation of the central bank’s hawkish stance. From a technical point of view, it fell below the last three weeks’ Value Area, and this can be considered a negative bias for today and probably for the next week. By doing this, prices started to fill out some volume gaps left in the zone below 1.0660. Currently, the most likely scenario is a continuation of the downtrend to target lower support areas around the 1.06 mark, after a pullback until the Low Volume Node around 1.0650. On the other hand, it will be very tough for the Euro to recover against the US Dollar, mainly due to the divergent monetary policy between the two central banks. However, if prices can break the W-1 VAL upward, the pair can still target higher resistances around the W-1 VAH again.
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: 1.06.
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: 1.0649, 1.0680, 1.0694, 1.0720.
GBPUSD, M30
The Cable is again below the psychological level of 1.25 ahead of the US CPI data. It closed yesterday below the daily Value Area, and sellers are still dominating the market this morning. From a technical point of view, the pair showed a lot of weakness, falling below the W-1 VAL and the current weekly VAL. This can be considered a negative bias for today. Currently, the pair is fighting to hold one of the last support around the 1.2480 mark. If prices can break this area downward, the most likely scenario is a continuation of the downtrend until the weaker support around 1.0450 and eventually until the 1.2380 mark in extension. On the other hand, if prices can regain the W-1 VAL, a bullish, temporary inversion still can target higher resistance around the W-1 VAH.
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: 1.2480, 1.2450, 1.2380.
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: 1.25, 1.2525, 1.2555.
