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EUROPEAN MANUFACTURING PMI WEIGH ON EQUITIES AHEAD OF THE US OPEN; UK’S PMI DATA BEAT EXPECTATIONS, WHILE THE GERMAN ZEW REACHED THE HIGHEST LEVEL IN ONE YEAR.

Most European equities trade in the negative this Tuesday in anticipation of the US cash opening. Currently, the Dax gives up 0.55%, the Cac40 0.60% and the Eurostoxx 0.70%.

Undoubtedly weighing on sentiment were the European PMI data released this morning, especially the manufacturing data, which disappointed expectations. While the composite and service sector PMIs improved on the previous data in Germany and France (as well as the EU), the manufacturing PMIs were below expectations. Nevertheless, equity markets immediately tried to get on the road to recovery in the wake of positive sentiment data, such as the Zew, which this morning came in at 28.1 versus the expected 22, thus reaching a one-year high.

Another positive note was the UK PMI data, which beat expectations (including the manufacturing figure, which came in at 49.2 against 47.5 expected). The Pound sterling reacted immediately, standing out among the best-performing currencies on the day. Traders also noted that the composite and services PMIs were above the 50 mark for the first time, indicating a return to growth.

Elsewhere, the Vix jumped, trading at its highest level since 10 January, indicating that some volatility is coming over the markets, especially now that equity markets seem to be trying to maintain their recent gains but with less strength.

As for the macroeconomic calendar, investors will focus on US PMI data, retail sales and Canadian PMIs today.

EURUSD, M15

As expected, the EURUSD did not post significant movement yesterday, so the setup remains unchanged. In particular, the most significant intraday resistance is between the W-1 POC and the W-1 VAL. Conversely, the most critical intraday support is the 1.0630 mark, followed by the wider support zone between the 1.0589 and the 1.0563 marks. From a technical point of view, as long as prices remain below the resistance, the most likely scenario is a continuation of the trend to test lower supports. On the other hand, a breakout of the resistance could lead the pair toward the W-2 VAL and the W-2 POC 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: 1.0630, 1.0589-1.0563.

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: 1.0667-1.0682, 1.0704, 1.0734.

S&P500, M30

The S&P500 broke the most important intraday support (the W-3 VAL), and after retesting it, it started to drop again. As for today, that area is the most significant intraday resistance. In contrast, the most crucial intraday support is the 4040 mark. From a technical standpoint, if prices remain below the resistance, the most likely scenario is a continuation of the drop to break the support. In this case, the next target could be the 4007 mark. Conversely, an inversion of the short-term trend toward the W-1 VAL could occur only if prices retrieve and consolidate above the resistance.

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: 4040, 4007.

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: 4058, 4093-4097.

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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