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EUROPEAN EQUITIES OPENED LOWER DESPITE A POSITIVE ASIAN SESSION; THE CHINESE TRADE BALANCE FELL MORE THAN EXPECTED, WHILE THE USD TRY TO RETRACE FROM FRIDAY’S LOW.

This week, European stocks opened on the downside, despite an all-positive Asian session. The ChinaA50 index gained 0.23 %, the ASX200 0.60% and the Nikkei 1.21%. The Shenzhen and Shanghai stock exchanges were also positive.

Negative data came in this morning about the dragon’s economy, which reported a shrinking trade balance more than expected. In addition, both imports and exports contracted for the first time since May 2020. This data comes after Chinese government officials over the weekend once again reiterated their resolve not to relax the zero-covid policies undertaken by the government, even though it is now clear that it is predominantly these policies that are slowing the Chinese economy.

Elsewhere, in the FX market, the dollar is trying to recover from Friday’s heavy losses (with the dollar index closing at -1.94 %). At the same time, the JPY continues to show relative weakness by failing to trade below 146 against its American counterpart. On the commodities front, on the other hand, negative signs prevailed, with WTI pert oil and major metals trading below parity, also aided by the USD’s attempted rebound.

As for the macroeconomic calendar, no notable data is expected to be released today, but it will be interesting to follow Lagarde’s scheduled speech, which is expected to give further details on the European QT.

EURUSD, M15

The EURUSD is trading in a sideways trend between the most crucial intraday resistance, the W-2 POC & W-1 VAH, and the most significant intraday support, the W-1 POC. From a technical point of view, as long as the pair remains between these two areas, the most likely scenario is a continuation of the sideways trend. A breakout of the resistance could lead prices to the LVN around the 1.0023 mark. On the opposite side, a breakout of the support could lead the pair to lower supports, the LVN around 0.9858 and the W-1 VAL in extension.

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: 0.9888, 0.9858, 0.9827.

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: 0.9972, 1,0023.

WTI, M15

The WTI is trading below the most significant intraday resistance area, the LVN, around the 90.85 mark. In contrast, the W-1 VAH is the most critical intraday support area. From a technical point of view, as long as prices remain below the resistance, the most likely scenario is a drop toward the support. On the flip side, a breakout of the resistance could lead prices to the 92.30 mark. If the black gold can break the support, a retracement to the W-2 VAH could occur.

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: 89.58, 88.93, 87.76.

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: 90.85, 92.30.

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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