Post by: PocketOption on Oct 11, 2022, 02:02 am
EUROPEAN EQUITIES ARE TRYING TO RECOVER BUT REMAIN MAINLY IN THE RED; GEOPOLITICAL TENSIONS CONTINUE TO ESCALATE WHILE THE VOLATILITY REMAINS HIGH.
European stocks look for mid-session recovery. However, awaiting the opening of the U.S. stock market, most European indexes currently remain in negative territory with losses between 0.10% and 0.40%. The only exception is the Dax, which is ahead by 0.55%. Risk-on assets continue to remain under pressure because of several factors, including possible and likely new substantial interest rate hikes by the FED, compounded this morning by new tensions on the geopolitical front, with launching a bombing raid on several ian cities including the capital Kyiv in response to the attack on the n bridge in Crimea (which Putin says was ordered by ian intelligence services). According to the CME FedWhatch Tool, markets estimate an 80% probability of a 75 bp hike at the next U.S. central bank meeting and a 63.3% probability of a subsequent 50 bp hike at the following December meeting. Expectations then are for an ever-aggressive Fed, as indeed widely anticipated by Powell and other FED officials. This attitude continues to keep pressure on the stock markets. However, we will also find new insights from the quarterly reports of several major companies that will begin to arrive this week.
As for the FX market, the dollar index is back above 113 and trades at +0.30%, while on the commodities front, gold and silver retrace slightly and are now on attractive medium-term supports; WTI also currently gives up about 1%, but after the last two weeks in which it has gained about 17% such a movement is more than natural, especially for profit-taking on the instrument.
Finally, as mentioned earlier, no significant data or news is expected to be released today except for some scheduled speeches by various FED and ECB officials.
EURUSD, M15
The EURUSD remained below the most significant resistance area, the W-2 VAH & W-1 VAL, and dropped to the support, the W-3 VAL. It is currently fighting to hold the area between the W-3 VAL and the daily LVN, which has become the most significant intraday resistance area. From a technical point of view, as long as prices remain below 0.9699-0.9709, the most likely scenario is a continuation of the trend to target the W-2 POC. On the flip side, if prices break the Daily LVN upward, a stretch to retest the 0.9743 mark 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: 0.9633.
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: 0.9709-0.9699, 0.9743.
S&P500, M30
The S&P index collapsed last Friday and trades around the most critical intraday support area, between the W-2 VAL and the W-2 POC. From a technical point of view, if prices break this area downward, the most likely scenario is a continuation of the trend to target the area around the 3558 mark. On the other hand, if prices can remain above the support, a stretch to the most significant intraday resistance area, between the W-2 VAH and the W-1 VAL, 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: 3619-3641, 3558.
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: 3679-3689.
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Source: US OPENING BELL 10-10-2022 (https://www.keytomarkets.com/blog/analysis/us-opening-bell-10-10-2022-16315/)