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EUROPEAN FUTURES REMAINS POSITIVE AHEAD OF THE US OPENING BELL; THE USD CONTINUED TO REGAIN TERRITORY AS US PRESIDENT BIDEN MET CHINESE LEADER XI JINPING.

Major European futures remain positive at mid-session ahead of Wall Street opening. Currently, the Dax is gaining 0.36%, the Cac40 0.34% and the Eurostoxx 0.39%.

The stock exchanges continue to celebrate last week’s US inflation figure. Still, sentiment remained subdued after Fed officials once again missed the opportunity over the weekend to reiterate how the monetary policies in place will have to be continued for a long time before the fight against inflation can be declared over.

Meanwhile, in the morning came Morgan Stanley’s report that the European and British economies will likely end up in recession next year. At the same time, the US may avoid recession thanks to the resilience of the labour market and the overall US economy. Overall, inflation is expected to peak by the end of this year. At this point, what will the markets wonder? They will probably wonder how quickly inflation will return to levels close to the 2% target. In that sense, if they realise that the return to the target will be prolonged despite high central bank rates, the market’s ascent may be more complicated than expected.

Other morning news is the meeting between US President Biden and Chinese counterpart Xi Jinping before the G20 summit in Bali. Investors are looking to see whether the two leaders may have made significant progress in relations between the two countries, which can now be said to be at rock bottom. If this is the case, i.e. if the two manage to ease the tensions coming from various fronts (-e war, Taiwan, North Korea), markets may have another reason to celebrate.

EURUSD, M15

The EURUSD broke the main intraday support area downward and is now trying to retest the area. From a technical point of view, the main intraday resistance area remains between the 1.0310 and the 1.0360 marks. It is possible to look for short entry setups around the broke support area as long as prices stay below the support (now resistance). Lower targets could be the LVN around the 1.0250 mark and the W-1 VAH. On the other hand, if prices break the resistance area upward, a stretch to the 1.0450 mark 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: 1.0250, 1.01615, 1.0092.

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: 1.03, 1.0310-1.0360, 1.0450.

S&P500, M30

The S&P500 is trading around one of the most critical medium-term resistance (the 4000-40500 area). As for today, the most crucial intraday resistance area is the 3986 mark. In contrast, the most significant intraday support is the LVN around the 3942 mark. From a technical point of view, as long as prices remain below the resistance, the most likely scenario is a drop to retest the support. On the flip side, a breakout of the resistance could lead prices quickly up to the 4100-4150 area due to low volumes above 4000.

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: 3942, 3916-3910.

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: 3986, 4000.

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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