US OPENING BELL 30-01-2023

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US OPENING BELL 30-01-2023

EUROPEAN SHARES REMAINED NEGATIVE BEFORE THE US OPENING BELL; THE VIX TRADING AT PERIOD LOWS COULD SIGNAL HIGH VOLATILITY AHEAD; THE GERMAN GDP MISSED EXPECTATIONS, WHILE OTHER EUROZONE’S SENTIMENT INDICATORS CAME IN BETTER THAN EXPECTED.

European equities failed to recover their morning losses for the time being and remain to wait for the opening of Wall Street to take a definitive direction. The Dax gave 0.83%, the Cac40 0.71% and the Eurostoxx 1.07%.

This morning the incoming data from the Eurozone failed to improve market sentiment further, mainly because they were mixed. On the one hand, the sentiment indicators for the Eurozone were better than expected, especially those relating to services, the industrial sector and inflation expectations. On the other hand, the German GDP largely disappointed expectations. The German economy contracted by 0.2 per cent every quarter against 0.0% expected, while the annual figure was 0.5 per cent against 0.8 per cent expected.

At the same time, it is essential to note that Spanish inflation, although Spain is not one of Europe’s leading economies, was slightly above expectations this morning and up for the first time in several months. At its meeting on Thursday, the ECB will have to decide on an upcoming rate hike, clarifying how it plans to deal on the one hand with inflationary pressures that, although declining, are far from defeated and on the other with growth prospects that are continuing to deteriorate.

Elsewhere, the VIX opened at +8.70% after hitting a low on Friday in the 18 area, one of its lowest levels in recent times. This could signal the arrival of strong volatility in the coming sessions.

As for the economic calendar, no other significant data or news will be released during the rest of the day.

EURUSD, M15

The EURUSD rose to the W-1 VAH and found many sellers in that area. From now on, this area is the most critical intraday resistance, while the most significant support becomes the area between the W-1 POC and the W-1 VAL. From a technical standpoint, if prices can quickly retrieve and overcome the resistance, the most likely scenario is another stretch to the yearly LVN. On the flip side, if the pair failed to overcome the resistance, another drop to the support 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: 1.0872, 1.0865, 1.0860.

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: 1.0902, 1.0945.

S&P500, M30

Despite the good performance of the last week, the index is trading this Monday below the most significant intraday resistance area, the W-1 VAH. In contrast, we can find two main intraday support: the first is between the 4019 and the 4013 marks, while the second is the W-2 POC. From a technical point of view, as long as prices stay above the support, another attempt to stretch toward the resistance is the most likely scenario. On the other hand, if prices pierce the support downward, the index could land on lower support, meaning the W-3 POC.

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: 4019-4013, 4000, 3949.

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: 4061, 4120.

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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