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EUROPEAN EQUITIES OPENED LOWER AFTER A NEGATIVE ASIAN SESSION; INVESTORS REMAIN IN WAIT-AND-SEE MODE AHEAD OF THE LAST CRUCIAL WEEK OF THE YEAR; UK’S GDP AND PRODUCTION DATA BEAT EXPECTATIONS.

Major European equities opened lower this Monday in the wake of a negative Asian session, where the ChinaA50 index lost 1.12%, the ASX200 0.45% and the Nikkei 0.21%.

Investors again weigh on the stock markets with news coming out of China, where covid cases have risen, reaching new highs after the government reverses its historic zero-covid policy. The fear is that a surge in cases could encourage a return to more aggressive virus containment policies, resulting in economic slowdowns due to possible lockdowns.

Meanwhile, this morning, positive data came in from Great Britain, where annual GDP came in at 1.5% against expectations of 1.4% and monthly GDP at 0.5% against expectations of 0.4%. But the most positive data came from industrial and manufacturing production, both significantly better than expected.

However, investors generally remain cautious and wait for the data and events characterising this week, which will be the last significant one of the year before the Christmas holidays. The most important market movers will be the US inflation figure to be released tomorrow, the Fed’s monetary policy meeting on Wednesday, which will update its economic forecasts, and the ECB meeting on Thursday. The BOE will also meet to decide on the next monetary policy moves.

As for the macroeconomic calendar, no major data is expected to be released today.

EURUSD, M15

The setup on EURUSD remains very indecisive, as evidenced by the close support and resistance levels. The most crucial intraday resistance area is the W-1 VAH. In contrast, the most significant intraday supports are the W-1 POC, the W-1 VAL and the W-2 VAH. From a technical standpoint, as long as prices remain below the resistance, the most likely scenario is a continuation of the drop to target the supports. On the flip side, a breakout of the W-2 VAH could lead prices toward the W-3 VAH.

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: 1.0514, 1.0495, 1.0483.

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: 1.0556, 1.0587, 1.0640.

WTI, M15

The WTI continued its drop last week and trades around the most significant intraday support area, between the W-1 POC and the W-1 VAL. In contrast, the most critical resistance area is the LVN, around the 73.53 mark. From a technical point of view, as long as prices remain above the support, the most likely scenario is a pullback towards the resistance. On the other hand, a downward breakout of the support could lead prices toward last Friday’s lows and eventually to the yearly HVN around the 68.90 mark.

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: 71.55-71.31, 70.26, 68.90.

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: 73.53, 76.36.

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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