US OPENING BELL 1-11-2022

[PocketOption]

US OPENING BELL 1-11-2022

EUROPEAN EQUITIES REMAIN POSITIVE AHEAD OF THE US SESSION; MARKETS ARE IN WAIT-AND-SEE MODE, WHILE THE BOE IS READY TO START QT.

Major European stocks remain positive this afternoon as they await the start of trading on Wall Street, which is also expected to rise. Currently, the Dax gains 1.12 %, the Cac40 1.62% and the Eurostoxx 1.44%. However, the market remains in “wait and see” mode, that is, waiting to see what the FED’s moves will be at tomorrow’s meeting before taking a firm position on the market. While it is indeed true that the rate hike is expected to be 75 bp (with very high probability), there remains uncertainty about what will be the words used by Powell in the press conference. As JP Morgan mentioned today, with such a hike and a dovish attitude from the central bank, the S&P could gain between 2.5 and 3%. Conversely, with a hawkish attitude (with the same rate hike), the main index could give up 1%. Only if there are surprises about the amount of the hike could there be more violent movements. Similarly, investors’ eyes are also on what the BOE will do on Thursday as it prepares to begin Quantitative Tightening, meaning the sale of the government bonds it currently has on its balance sheet (amounting to a total of 838 billion pounds). However, the bank has already clarified that the sales will focus on medium and short maturities, but certainly not longer than 20 years. Also in the morning, the UK Manufacturing PMI showed a slightly above-expected result but remained on a negative trend, highlighting the sector’s difficulties. Reactions on Cable were somewhat muted.

Elsewhere, on the FX front, the retracement of the US dollar continues, currently trading below 111 (dollar index), cancelling virtually all of yesterday’s bullish excursion. On the crypto front, the rise of BTC and ETH continues for the time being after yesterday’s downtrend; these assets, like all other risk-on assets, are also hoping for a less aggressive or at least more explicit FED on the timing and modalities of monetary tightening slowdown.

As for the macroeconomic calendar, this afternoon, investors will focus on the ISM Manufacturing PMI and new jobs Jolts in the US and the New Zealand labour market PMI to be released in the evening.

EURUSD, M15

The EURUSD failed to break below the support around the 0.9908 mark (blue line on the chart) and started to rise, breaking the resistance area around the W-1 VAL. Currently, the latter has become the most significant support for the rest of the day. In contrast, the most important resistance is the W-1 POC. From a technical point of view, as long as prices remain above the support, a stretch to the upper resistance is the most likely scenario. On the flip side, a drop below the support and below the 0.9908 mark could lead prices back to the HVN.

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: 0.9929, 0.9908, 0.9880.

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: 0.9968, 1.0017.

S&P500, M30

The S&P500 continues its rise and is now trading above the most significant intraday support area, the 3900 mark. The index is now edging toward the main medium-term resistance area (blue rectangle in the chart), where sellers could rejoin the market around the weekly uncovered POC. From a technical point of view, a stretch to the resistance area and the uncovered POC is expected as long as prices remain above the support. On the flip side, if prices break the support downward, a drop to the W-1 VAL becomes the most likely scenario.

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: 3900, 3870, 3858, 3840.

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: 3925, 3946, 3960.

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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