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EUROPEAN STOCKS OPENED DEEP IN THE GREEN AFTER A POSITIVE ASIAN SESSION; THE NEW ZEALAND CPI CAME IN HIGHER THAN EXPECTED, WHILE THE USD RETRACED SLIGHTLY.

European equities opened in the green this Tuesday, with all major indices well above parity. These gains in the opening of the European session come on the heels of a similarly positive Asian close, with the ASX200 index gaining 1.72% and the Nikkei 1.2%; the only index in the region that posted slight losses, however, was the ChinaA50, after the US government tightened restrictions on Chinese companies access to US-made semiconductors. The move is expected to blow China’s chip manufacturing ambitions, which could slow economic growth in the coming months. Meanwhile, last night New Zealand’s inflation figure came in; the annual figure came in at 7.2% versus 6.6% expected, and the quarterly figure came in at 2.2% versus 1.6% expected. Once again, therefore, it seems that for the time being, there are no clear signs of a change in the global inflation trend, with many investors still wondering whether the famous inflation peak has passed or not. In Europe, market sentiment improved after the intervention of the new Chancellor of the Exchequer in the UK, who virtually eliminated all previous tax cuts, calming the market and bringing the 30-year gilt yield back below 4.4 % even without BoE intervention.

Elsewhere, European gas prices continued to fall, with the TTF trading at its lowest level since the end of June; the WTI also continued to fall, attempting to post a bullish day after bottoming near $84 per barrel.

As far as the macroeconomic calendar is concerned, the most important data to watch today will be the German ZEW and American industrial production, as well as some scheduled speeches by various ECB and Bundesbank representatives.

EURUSD, M15

The EURUSD, following the US indices’ upward move, rose strongly yesterday and reached one of our resistance around the weekly LVN. It then breaks it upward and is now trying to consolidate above it. From a technical point of view, the most likely scenario is a continuation of the trend toward the W-2 VAH after a pullback to retest the main intraday support area between the Weekly LVN and the 0.9850 mark (blue line on the chart). On the flip side, a drop to the W-2 POC is expected if prices come back below the support.

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: 0.9850-0.9857, 0.9823, 0.9800.

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: 0.9904.

WTI, M15

The WTI continues its retracement and is now trading around the most important intraday support, between the W-2 VAL and the LVN around the 84.45 mark. In contrast, the most significant resistance area between the W-1 VAL and the W-1 POC. From a technical point of view, as long as prices remain above the support, the most likely scenario is a rise to the resistance. A breakout of the resistance could lead prices toward the two upper LVN. On the other hand, if prices drop below the support, a decline to the W-3 VAH around the 81 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: 84.99-84.45, 81.09.

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: 85.96-86.25, 87.00, 88.21.

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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