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EUROPEAN EQUITIES REMAIN POSITIVE AHEAD OF THE US SESSION; THE GERMAN ZEW IMPROVED SENTIMENT, WHILE INVESTORS START TO LOOK AT THE EUROPEAN CPI TO BE PUBLISHED TOMORROW.

European equities remain firmly positive ahead of the US session, with the Dax currently gaining 1.19%, the Cac40 0.72% and the Eurostoxx 1.14%. Some news and data released this morning helped improve market sentiment, leading to a renewed appetite for risk in the market, with so-called safe-haven assets losing ground instead, albeit only slightly. Among these factors was undoubtedly this morning’s FT news that the BoE, after the government’s drastic retreat on the fiscal plan, was even planning to postpone the start of Quantitative Tightening, i.e. the sale of the long-dated bonds it holds on its balance sheet, to continue supporting the market, albeit indirectly. Secondly, improving sentiment was undoubtedly the German ZEW data; as we know, the ZEW is a very important sentiment indicator. This morning, it was higher than expected, coming in at -59.2 against the -65.7 expected. At this point, investors are waiting for confirmation from the Eurozone CPI figures to be released tomorrow to understand the ECB's next moves at next week’s meeting.

Elsewhere, WTI continued its downward slide, helped by news from Reuters that the Biden administration plans to sell off part of the Strategic Petroleum Reserve to calm fuel prices this week. Other commodities were stable, as were the major cryptocurrencies.

As for the economic calendar, for the rest of the day, investors will focus on US industrial production data and the various scheduled speeches by different ECB and Bundesbank officials.

EURUSD, M15

The EURUSD failed this morning to remain above the most crucial intraday support between the weekly LVN and the 0.9850 mark (blue line on the chart). The pair broke the support downward and posted an excellent pullback to retest the area, dropping to the lower support around the 0.9823 mark. From a technical point of view, the most intraday resistance area is the last broken support; in contrast, the most significant intraday support area is the 0.9823 mark. As long as prices remain below the resistance, the most likely scenario is a continuation of the drop to break the support towards the W-2 POC. On the other hand, if prices do not break the support downward, another stretch to the weekly LVN and the W-2 VAH 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: 0.9823, 0.9800, 0.9749.

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: 0.9850-0.9857, 0.9904.

S&P500, M15

The S&P500 continues its rise during the first part of the European session and is now trading above the most important intraday support area, the weekly LVN around the 3723 mark. The most significant intraday resistance area is the W-2 POC. From a technical point of view, as long as prices remain above the support, a continuation of the rise is expected to target the W-2 POC (which is uncovered). On the flip side, if prices break the support downward, a drop toward the area between the W-3 VAH and the W-2 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: 3723, 3679-3690.

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: 3772, 3807.

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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