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EUROPEAN EQUITIES INCREASED GAINS AFTER THE US CPI, WHICH CONFIRMED EXPECTATIONS; MIXED DATA CAME FROM THE UK, WHILE THE EU INDUSTRIAL PRODUCTION RESULTED STRONGER THAN ANTICIPATED.

World and European stock exchanges continued their positive trend towards the end of the week, following yesterday’s US CPI figure. Currently, the Dax advances by 0.17%, the Cac by 0.33% and the Eurostoxx by 0.40%.

Sentiment remains very positive, driven by the US inflation figure, which came in perfectly in line with expectations, thus down from previous readings. Specifically, the CPI (YoY) came in at 6.5% as expected, as did the CPI Core (YoY) and CPI Core (MoM), which were released at 5.7% and 0.3%, respectively. At the same time, in the labour market, initial jobless claims amounted to 205K (slightly better than expected). These data show, for the time being, that the Fed is succeeding in its attempt to quell inflation and still has room for manoeuvre in its rate hike policy because the labour market remains healthy. Currently, the market is pricing in a 92% probability of an upcoming 25 basis point rate hike, up sharply from yesterday morning.

Meanwhile, this morning from the UK came the much-anticipated GDP and industrial and manufacturing production data. GDP came in surprisingly above expectations on a monthly basis (0.1% versus -0.3% expected) and below expectations on an annual basis (0.2% versus 0.3%). On the other hand, industrial and manufacturing production was lower than expected. The market, in any case, is penalising the pound (-0.36% against the dollar at the moment).

Elsewhere, WTI continued to rally, rising for the fifth consecutive day, while precious metals also remained at period highs. Also worth noting is the sharp jump in the major cryptos, boosted by the dollar’s decline. The BTC returned close to the 19,000 mark, while ETH rose above the 1,400 mark.

As far as the macroeconomic calendar is concerned, there is no significant data to report today.

EURUSD, M15

The EURUSD halted its rise posting a triple top around the 1.0870 mark, and started to pull back toward the current weekly VAH, which is the most significant intraday support. 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 1.0870 area. On the flip side, if prices break the support, they could land on lower support, meaning the current weekly POC.

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: 1.0810, 1.0743, 1.0720.

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: 1.0870.

S&P500, M30

The S&P500 started the day negatively but still trades above the most significant intraday support area between the LVN and the current weekly POC. In contrast, the most crucial intraday resistance is the current weekly VAH. 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 uncovered POC. On the other hand, a breakout of the support area could lead prices to invert the short-term trend toward lower supports.

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: 3944-3927, 3853-3855.

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: 3998, 4032.

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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