US OPENING BELL 11-11-2022

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US OPENING BELL 11-11-2022

EUROPEAN EQUITIES REMAIN POSITIVE AHEAD OF THE US OPENING BELL IN THE WAKE OF US CPI DATA; CHINA TOOK THE FIRST STEP TO RELAX ITS ZERO COVID POLICY, WHILE THE EURUSD REACHED THE HIGHEST LEVEL SINCE AUGUST THIS YEAR.

The major European indexes remain positive after yesterday’s excellent performance following the U.S. inflation figure, which fell above estimates. Currently, the Dax gains 0.53%, the Cac40 0.37% and the Eurostoxx 0.68%.

The U.S. data strongly impacted the entire market, which dramatically changed its expectations on the next rate hike by the FED. Before yesterday’s CPI, expectations were for a 75 bp hike at 80% versus a 50 bp hike at 20%. After the data, expectations are evenly split at 50%.

This led to a sharp decline in the U.S. dollar and a sharp rise in the equity segment, resulting in a decline in yields on bonds. Also, on the FX front, note how the EURO trades against the dollar at its highest since last August.

Meanwhile, WTI oil also shows a good performance thanks to the dollar weakness and the news coming out of China, which has finally taken some tangible steps related to easing the zero-covid policy.

As far as the macroeconomic calendar is concerned, no significant data is expected to be released today. Still, it will be necessary to closely follow the scheduled speeches of ECB members and the Michigan Consumer Sentiment in the United States.

EURUSD, M15

The EURUSD is trading close to the main intraday resistance area, the yearly LVN around the 1.0308 mark. In contrast, the most significant intraday support is the 1.0254 mark. From a technical point of view, if prices break the resistance to the upside, a stretch to the higher yearly LVN around the 1.0440 mark could occur. On the flip side, if prices remain below the resistance, a pullback to the support and the 1.0206 mark is the most likely scenario.

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: 1.0254, 1.0206, 1.0099.

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: 1.0308, 1.0440.

S&P500, M30

The S&P500 rose strongly after yesterday’s CPI data and is trading around the most significant intraday resistance area, between the 3974 and the 3987 marks (the blue rectangle on the chart). In contrast, the oldest uncovered POC is the most significant intraday support area. From a technical point of view, as long as prices remain below the resistance, the most likely scenario is a pullback to the support. On the flip side, if prices break the resistance upward, the last resistance is the psychological level of 4000. A stretch of a hundred points could occur if prices consolidate above the 4000 area.

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: 3946, 3915.

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: 3974-3987, 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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