US OPENING BELL 03-10-2022

[PocketOption]

US OPENING BELL 03-10-2022

EUROPEAN EQUITIES CONTINUE TO TRADE BELOW PARITY AHEAD OF THE US OPENING BELL; THE UK GOVERNMENT GIVES IN AND AMENDS TAX REFORM, WHILE THE USD HOLD THE 110 AREA.

European equities continue to trade below parity at mid-session, ahead of an American session likely to prove pivotal in the week’s trend. Currently, the Dax is giving up 0.4 per cent, the Cac40 0.89 per cent and the Eurostoxx 0.70 per cent. The macroeconomic data that continue to arrive certainly fail to improve investors’ expectations, as it remains primarily negative. This morning, the German Manufacturing PMI came in at 47.8 against 48.3 expected, the lowest level since July 2020. The same goes for the French, the UK and European PMI data as a whole (at 48.4 versus 48.5), all of which disappointed expectations. The only exception was Italy, which reported a higher-than-expected figure but still below the 50 threshold separating expansion from contraction in the sector. Meanwhile, after intense political and financial pressure in recent days, the UK government announced this morning that it had abandoned plans to cut the top income tax rate, deemed by many to be unsustainable.

Elsewhere, oil continued to rally, currently trading at +4.23% on the back of rumours that OPEC+ will proceed with a production cut of around 1 million barrels per day at its meeting on Wednesday. Given the market reaction at the moment, there could be surprises and strong movements if the cut turns out to be lower or higher than expected. On the currency front, the US dollar, after having retraced from recent highs, seems to be holding its ground at the 110 (dollar index).

As for the macroeconomic calendar, the focus will be on the ISM manufacturing PMI in the US this afternoon.

EURUSD, M15

The EURUSD continued its drop toward the support as expected. Prices created a new resistance area around the 0.9784 mark. From a technical point of view, the latter becomes the most critical resistance area for the rest of the day. As long as prices remain below it, the most likely scenario is a continuation of the drop to break the lower support (the W-1 VAH) toward the W-2 VAL. On the flip side, a new retest of the W-2 POC is expected if prices break the resistance upward.

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: 0.9784, 0.9838.

S&P500, M30

The S&P500 is trading around yearly lows. From a technical point of view, the most important support is the area between the 3585 and 3530 mark (the blue rectangle in the chart). As long as prices remain above the support, a rebound is expected to retest the W-1 VAL and the W-1 POC. However, to expect a remarkable price recovery, it could be necessary to break the W-1 VAH upward. On the other hand, if prices break the support downward, the yearly trend is expected to continue.

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: 3585-3530.

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: 3619-3641, 3689, 3763.

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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