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EUROPEAN EQUITIES OPENED LOWER AFTER A NEGATIVE ASIAN SESSION; THE JPY AND THE YUAN HIT NEW RECORD LOWS AS THE FED MAINTAINS HAWKISHNESS.

The leading European indices opened this Thursday below parity after a negative Asian session, where the Chinese ChinaA50 index lost 0.02%, the ASX200 1.02% and the Nikkei 0.91%. The main currencies of the Asian continent also continued to fall overnight, marking new record lows. In particular, the USDJPY exchange rate came very close to the fateful 150 threshold, at which, according to the latest news, the BoJ should intervene to support the national currency after having already done so the first time around 145; similarly, the USD vastly exceeded the 7 mark against the Chinese Yuan, marking the lowest ever reached by the Beijing currency. These negative records are undoubtedly the result of the continued hawkish rhetoric of the FED, which, with all its exponents, continues to reiterate that it believes it is appropriate to raise rates by 75bp in the next two meetings and to continue with the hikes until there is evidence that inflation is returning to its long-term target. This, of course, drives up USD-denominated bond yields and thus drives up the value of the currency itself, penalising all major counterparts internationally. In particular, the US 10-year bond yield reached levels not seen since 2008, while the 2-year bond yield rose to its highest level since 2007. The yield curve is, therefore, still inverted.

Elsewhere, low volatility continued in the major cryptocurrency market, with BTC and ETH now moving in a narrow sideways trend since mid-September; on the commodities front, however, the continued decline in European gas, which trades at 112 at its lowest level since last June (and thus again below the closing level of 24 February, the day the war in e began.

As for the economic calendar, today’s most important data will come from the States and will be initial claims for unemployment benefits, the Philadelphia Fed’s manufacturing index and existing home sales.

EURUSD, M15

The EURUSD posted a retest of the old support area (now resistance) between the LVN and the W-2 POC yesterday before dropping again and reaching the 0.9750 mark. It recovered from there and is currently trading slightly above the most significant intraday support area, which is the 0.9780 mark (blue line on the chart). From a technical point of view, as long as prices remain above the support, the most likely scenario is a continuation of the rise toward the W-2 POC. On the flip side, if prices come back below the support, a drop to the 0.9750 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: 0.9780, 0.9750, 0.9707.

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: 0.9808-0.9820, 0.9856, 0.9904.

GBPUSD, M15

The Cable is trading around the most critical intraday support area, between the W-1 VAH and the 1.1191 mark (blue line on the chart). From a technical point of view, as long as prices remain above this area, the most likely scenario is a rise to the most significant intraday resistance, the D-1 VAH. On the other hand, if prices drop below the support and consolidate below it, A drop to 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: 1.1221-1.1191, 1.1150.

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: 1.1282, 1.1325.

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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