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THE LONDON OPEN 17-10-2022

Started by PocketOption, Oct 18, 2022, 06:46 am

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THE LONDON OPEN 17-10-2022

EUROPEAN EQUITIES EDGE HIGHER DESPITE A NEGATIVE ASIAN SESSION; INVESTORS’ EYES ARE ON THE BRITISH ECONOMIC SITUATION, WITH THE GBP TRYING TO RECOVER AS A POSSIBLE POLICY BACKFLIP.


European shares opened this first day of the week on a positive note after a negative Asian session, with the ChinaA50 index losing 0.87%, the ASX200 losing 1.40% and the Nikkei 1.20%. Market sentiment remains precarious, but overnight most currencies recovered against the dollar, which appears to be down slightly this morning. Investors are now focused on the political and economic situation in the UK, where PM Truss is under pressure over the new fiscal plan, which, after much criticism and changes, has led to the appointment of a new chancellor of the Exchequer. The new chancellor will be Jeremy Hunt, who has already hinted over the weekend that the fiscal plan will probably have to be revised, thus giving hope to the markets, which had been severely frightened by a policy that did not have sufficient economic backing. His first public speech is expected later today. Great attention is also being paid to the market for long-dated government bonds after the BoE withdrew any measures previously taken to support Gilt prices on Friday.


Another important event was the 20th national congress of the Chinese Communist Party, where President Xi touched on a variety of topics, but in which he did not touch on one key point for the markets, namely the country’s zero covid policy, which is likely to remain unchanged. This policy has been the most significant cause of the economic slowdown in China, but the regime does not intend to retrace its steps. However, the president reiterated that everything necessary would be done to support the economy. Meanwhile, the yuan trades at 7.20 against the US dollar, well off the 28 September highs.


As far as the macroeconomic calendar is concerned, no significant data are expected today, except for the New Zealand CPI in the evening. Still, it will be interesting to follow the various scheduled speeches of the ECB representatives closely.




EURUSD, M15



The EURUSD found a great resistance area around the 0.9750 mark. From a technical point of view, the latter is the most significant intraday resistance area, while the most critical intraday support is the W-1 POC. As long as prices remain below the resistance area, the most likely scenario is a drop toward the support and the W-1 VAL in extension. On the other hand, if prices can overcome and consolidate above the resistance, a stretch to the W-2 POC 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: 0.9707, 0.9689, 0.9636.


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: 0.9749, 0.9800.


GBPUSD, M15



The GBPUSD recovered slightly from recent lows after the situation over the new fiscal plan in the UK has been changed multiple times. The market is currently waiting for the first speech of the new chancellor of the Exchequer, Jeremy Hunt. From a technical point of view, the most significant intraday resistance area is the W-2 POC, while the most critical intraday support area is the W-1 VAH. As long as prices remain above the support, the most likely scenario is a continuation of the rise to the resistance and the W-2 VAH in extension. On the flip side, if prices fall below the support, a drop to the W-2 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: 1.1220, 1.1149, 1.1063.


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: 1.1323, 1.1390.


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


The post THE LONDON OPEN 17-10-2022 appeared first on Key To Markets Blog.


Source: THE LONDON OPEN 17-10-2022