Started by PocketOption, Feb 04, 2023, 11:23 am
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After yesterday’s strong performance, major European equities fell this morning ahead of the US opening, especially in anticipation of the critical NFP data, which could, together with recent central bank decisions, determine market trends in the coming weeks. The Dax is currently down 0.58%, the Cac40 0.20% and the Eurostoxx 0.38%.
Yesterday was marked by the meetings of the ECB and the BOE, which, as expected, raised interest rates by 50 bps. The ECB, in particular, signalled a subsequent increase of another 50 bp in March, specifying that afterwords, decisions will be date dependent (as with the Fed). On the other hand, the BOE did not clarify its intentions on future hikes, especially as the UK economic situation remains very precarious, with growth estimates being among the lowest among developed countries. The market, however, read the statements in a dovish light, as it now sees rates peaking during this first part of the year, then remaining at that level until the end of the year and falling again in 2024.
As interesting as it was unusual was the performance of the VIX yesterday, which closed up at +4.82%, while all major indices closed positive. The relationship is usually inverse so that a volatility explosion could be on the horizon.
Yesterday evening also saw the release of the earnings of the big US tech companies, which overall disappointed expectations, leading to retracements in the major stock markets.
As for today’s macroeconomic calendar, the key events will be NFP, US unemployment, and the IS non-manufacturing PMI. Unemployment is expected to rise slightly to 3.6%, while NFP is forecast to fall to 185K.
The EURUSD trades below the most crucial intraday resistance area, the current weekly VAH. In contrast, the most significant intraday support is the W-1 VAH, but as we can see from the chart, there are many other supports below that area where prices could find difficulties in breaking through. From a technical point of view, as long as prices remain below the resistance, the most likely scenario is a retracement to retest lower supports. On the flip side, if prices can overcome the resistance, the pair could try to stretch toward the higher resistance between the 1.1039 and 1.1054 marks.
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: 1.0902, 1.0872-1.0860, 1.0836.
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: 1.0941, 1.1039-1.1054.
The S&P500 reached and overcame the target of 4166 as per the previous analysis. However, it is trading below it and below the most significant intraday resistance created yesterday between the 4182 and 4178 marks. The most crucial intraday support is the yearly HVN. From a technical standpoint, as long as prices remain below the resistance, the most likely scenario is a retracement toward the support and the W-1 VAH. On the other hand, if prices rise above the resistance, they could prepare the path to reach the Y-1 VAH.
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: 4120, 4061, 4019.
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: 4166, 4178-4082.
POC= Point of ControlVAH= Value Area HighVAL= Value Area LowLVN= Low Volume NodeHVN= High Volume NodeW-1= last weekW-2= two weeks agoW-3= three weeks agoD-1= yesterdayD-2= two days agoD-3= three days ago
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