Post by: PocketOption on Sep 05, 2022, 01:43 pm
EUROPEAN EQUITIES OPENED LOWER AFTER A NEGATIVE ASIAN SESSION; POTENTIAL ENERGY SHORTAGES IMPACTED THE SENTIMENT WHILE THE USD HIT A NEW HIGH.
European stocks opened sharply lower this Monday after a mixed Asian session, where the ChinaA50 index lost 0.97% and the Nikkei 0.11%, while the ASX200 gained 0.34%. Weighing on market sentiment was the news, confirmed over the weekend, that the gas flow from the major pipeline (Nord Stream) has now been halted due to another indefinite outage. The pipeline has previously been interrupted and was supposed to resume regular operation.
This will impact gas prices, which will rise, and consequently, European inflation, which is already skyrocketing. Thus the ECB, at its meeting this week, will have even more pressure regarding monetary policy choices as it may be pushed to make another big rate hike before it is too late.
Elsewhere the dollar marks a new period high on the currency front (dollar index high at around 110.30). In contrast, on the commodities front, oil attempts a rebound on the day of the OPEC meeting and currently trades at +2.36%. In contrast to investors’ concerns, no production cuts by the major producing countries are expected in this regard.
As for the macroeconomic calendar, investors will focus today on PMI data from Germany and Britain, Europe, and Eurozone retail sales.
EURUSD, M15
The EURUSD continued its drop and broke the low of the 23rd of August downward, and it is now fighting to retrieve it. From a technical point of view, as long as prices remain below the 0.9904 mark, a continuation of the drop is expected: the two potential targets could be the 0.9830 mark and the 0.9700 mark in the medium term. The most significant intraday resistance area is around the 0.9904 mark. They could reach the W-2 VAL and fill the opened gap if prices can overcome it.
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: 0.9977, 0.9830, 0.9700.
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: 0.9904, 0.9945, 0.9975, 1.0002.
GBPUSD, M15
The GBPUSD followed the same EURUSD setup, continuing its downtrend. The pair almost reached the end of March 2020 low and is currently trading slightly above it. From a technical point of view, the most critical resistance area is between the W-1 VAL and the W-1 POC. If prices can break the resistance upward, they could have a chance to recover temporarily from recent losses and reach the W-1 VAH again. On the other hand, the most significant support is the 1.1437 mark. Should prices break this low downward, the pair would drop into unchartered territory, so it would be essential to wait for other supports to be created below that low to understand where the cable could eventually rebound.
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: 1.1437.
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: 1.1522, 1.1552, 1.1663.
The post THE LONDON OPENING 05-09-2022 appeared first on Key To Markets Blog.
Source: THE LONDON OPENING 05-09-2022 (https://www.keytomarkets.com/blog/analysis/the-london-opening-05-09-2022-14972/)