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EUROPEAN STOCKS OPENED HIGHER AFTER A MIXED ASIAN SESSION; GDP AND MANUFACTURING PRODUCTION DATA IN THE UK RESULTED WORSE THAN EXPECTED, WHILE INVESTORS’ EYES ARE NOW ON THE FED MINUTES.

Most European stocks opened higher this morning after a mixed Asian session, where the ASX200 index gained 0.04%, and the Nikkei gave up 0.02%. On the other hand, much sharper losses were recorded in the Chinese market after the U.S. government’s crackdown hit the country’s technology companies on restrictions on the sale of U.S.-made microchips; the China A50 index gave up 1.5%. Also, in the morning came data from the United Kingdom on GDP and manufacturing output, which were below expectations. Specifically, year-on-year GDP was 2% versus 2.4% expected, while manufacturing output was -6.7% (versus 0.8% expected) year-on-year and -0.3% (account 0.0% expected) month-on-month. Volatility also continues on the pound due to the confusion that is reigning in the British market, with the BoE seemingly unable to reassure markets: last night Governor Bailey had made it clear that the extraordinary interventions to curb the very high volatility in the long-dated Gilt market would end as planned this Friday, and urged pension funds to make portfolio rebalancings in these remaining three days to avoid the various margin call risks; this morning, however, a report in the Financial Times explained that the BoE would privately tell the big investment banks that it is ready to extend support if necessary. Once again then, conflicting decisions changed in a matter of hours. Investors are therefore continuing to monitor the British situation, not forgetting developments in geopolitical tensions. Above all, they are waiting for more information on the FED’s actions, with the Minutes of the September meeting to be released this evening.

Elsewhere, WTI oil is trying to recover from the losses of the past two days and is currently trading at +0.40%, while European gas, although continuing to record fairly significant intraday highs, is trading at its lowest since late July.

Regarding the macroeconomic calendar, today, it will be necessary to pay attention to the US PPI data, ECB President Lagarde’s speech, and, as mentioned, the FOMC meeting minutes.

EURUSD, M15

The EURUSD continues its sideways trend and seems unable to break either the resistance or the support, signalling the presence of a real fight between buyers and sellers around this area. From a technical point of view, the most significant intraday resistance area is between the D-1 VAH and the 0.9743 mark, while the most critical support is the W-3 VAL. As long as prices remain below the resistance, the most likely scenario is a continuation of the trend to target the W-3 VAL and the W-2 POC in extension. On the other hand, if prices break the resistance upward and consolidate above it (which they were unable to do yesterday), a stretch to the W-1 POC 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: 0.9699, 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: 0.9730-0.9743, 0.9800.

GBPUSD, M15

The GBP is trading around the most significant intraday resistance area, the weekly LVN, but the volatility remains high, so we have to expect more extensive movements. The most important support is the W-2 VAH. From a technical point of view, as long as prices remain below the resistance, the most likely scenario is a continuation of the drop toward the support. On the flip side, if prices break the resistance upward, a stretch to the 1.1060 mark and the W-1 VAL in extension 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: 1.0905, 1.0785.

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: 1.1012, 1.1151-1.1195.

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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