THE LONDON OPEN 03-10-2022

[PocketOption]

THE LONDON OPEN 03-10-2022

EUROPEAN EQUITIES OPENED LOWER AFTER A MIXED ASIAN SESSION; VOLATILITY REMAIN HIGH; THE WTI ROSE AS OPEC+ IS SET TO CUT OIL OUTPUT.

European equities started the first week of the new quarter on a positive note after a mixed Asian session, where the ASX200 index gave up 0.27% while the Nikkei gained 0.93%; Chinese stock exchanges were closed for holidays. Investor sentiment remained fragile after the major US indices closed the worst September since 2002, amid fears of tightening monetary policies and inflationary pressures that show no signs of stopping, compounded by recent escalations in the -e conflict. In the meantime, volatility remains high, with the Vix and Vstoxx above the 30s. The UK’s new government’s tax reform also continues to hold sway, with experts predicting that after talks over the weekend, it looks set to fail to pass a vote in parliament unless substantial changes are made.

Elsewhere, oil prices rose during the Asian session following news that OPEC+ countries are set to cut oil production at Wednesday’s meeting. The cut could be substantial and amount to about one million barrels per day. The objective is clear, to support the market, which just closed its fourth month in the negative.

As far as the macroeconomic calendar is concerned, investors’ attention today will be mainly focused on the manufacturing PMI data from Italy, France, Germany and the UK, while in the afternoon, the focus will be on the ISM manufacturing PMI.

EURUSD, M15

The EURUSD is trading above last week’s Value Area, which can be considered a positive bias for today. However, the pair is in a sideways trend that is likely to continue as long as prices remain between the most crucial intraday support and resistance areas. The Most significant intraday support is the W-1 VAH, while the most critical intraday resistance area is the W-2 POC. From a technical point of view, the most likely scenario is a continuation of the trend toward the support. On the flip side, if prices break the resistance upward a stretch to the W-1 VAH is expected, even if the area between the W-2 POC and the W-1 VAH is dense in volume, so the climb will not be easy for the pair.

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: 0.9743, 0.9689, 0.9630.

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: 0.9838, 0.9967.

GBPUSD, M15

The Cable is trading around the W-2 VAL, the most significant intraday resistance area. In contrast, the most critical intraday support area is the weekly LVN around the 1.1019 mark. From a technical point of view, as long as prices remain below the resistance, the most likely scenario is a drop to retest the support. If prices break the support downwards, they could easily target the W-1 VAH. On the flip side, if the pair start to consolidate above the resistance, a stretch toward the W-2 POC is expected.

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: 1.1019, 1.0908.

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: 1.1198, 1.1364.

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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