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EUROPEAN STOCK MARKETS REMAIN CAUTIOUS AHEAD OF THE FED MEETING; EUROPEAN MANUFACTURING PMI CONTINUE TO SLIDE; US LABOUR MARKET CONFIRMED ITS STRENGTH.

Major European stocks remain little moved, although predictably, as they await the FOMC decision this evening. All European major stock exchanges currently trade in the range of +0.07% -0.28%. Also weighing on the dominant wait-and-see mode on the various stock markets is the announcement of a new lockdown in the city of Zhengzhou, China, following the latest speculation about the possible loosening of the Chinese government’s zero-covid policy starting next year.

Somewhat harmful data came in this morning from the European manufacturing PMI, with the continental figure coming in at 46.4 versus 46.6 expected, while the German figure came in at 45.1 versus 45.7 expected. These results are the worst since the first lockdown in 2020 and again make it clear how the European economy is in a very different situation from the U.S. economy.

Nonfarm employment change (ADP) in the States, which was higher than expected and up for the third consecutive month, confirmed this version. Thus, the U.S. labour market is still healthy, and it seems that the Fed has plenty of room to continue its fight against inflation before reaching the famous pivot.

Elsewhere, although no significant movements were seen in the various markets, it is necessary to point out the excellent performance of the JPY, which is the top performer among currencies, with gains in the range of half a percentage point against its major counterparts.

As for the macroeconomic calendar, the focus today will be on the FOMC decision and Powell’s subsequent press conference.

EURUSD, M15

The EURUSD, with this morning’s upward movement, showed seller presence in the highlighted area (blue rectangle on the chart). This area is the most significant intraday resistance for the rest of the day. In contrast, the most critical support remains the current weekly VAL. From a technical point of view, as long as prices remain below the resistance, a drop to retest the support is the most likely scenario. Conversely, a breakout of the resistance could lead prices to target upper resistances, starting from the W-1 VAL.

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: 0.9872, 0.9848, 0.9831.

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: 0.99-0.9912, 0.9929, 0.9968.

S&P500, M30

The S&P500 is trading in a tight range before the FOMC decision. From a technical point of view, the most crucial intraday support is between the 3832 mark and the W-1 POC. In contrast, the main intraday resistance is the W-1 VAH. If prices remain above the support area, the most likely scenario is a retest of the resistance. On the flip side, if prices break the support downward, further drops are expected toward the W-1 VAL.

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: 3840-3832, 3791.

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: 3870, 3900.

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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