US OPENING BELL 31-08-2022

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US OPENING BELL 31-08-2022

EUROPEAN STOCKS TURNED NEGATIVE AFTER HIGHER-THAN-EXPECTED CPI DATA, WHICH HIT A NEW RECORD; THE WTI CONTINUES TO COLLAPSE WHILE THE USD CAME BACK AGAIN AROUND RECENT HIGHS.

European stocks veered downward during the morning, and at the moment, the major indexes are all travelling in negative territory, with the Dax losing 0.63 %, the Cac40 0.84% and the Eurostoxx 0.51%. Undoubtedly weighing on sentiment this morning were the European inflation data, all higher than expected, hitting a new all-time high. The CPI (YoY) figure stood at 9.1%, against expectations of 9% and up from the previous figure of 8.9%. The figure is even more problematic when one considers that the HICP ex Energy and Food came in at 5.5% against an expected 5.1%, implying that inflationary pressures are due to a generalized price rise. This, as mentioned earlier, will put even more pressure on the ECB for the upcoming monetary policy meeting, at which some investors say an interest rate hike of 75 bp will also be discussed, something that has so far been highly unlikely. At the individual country level, however, inflation was lower than expected in France and higher than expected in Italy, where it has hit a record high since 1985.

Oil meanwhile continues to plummet, putting it down -3.28% for the time being after yesterday’s -5.54%, thus wiping out much of the gains accumulated since mid-August. These declines came even though the latest data from the States confirms that demand from the world’s largest oil consumer is still strong. So in this sense, it will be essential for investors to understand and interpret the Crude Oil Stocks released today. No further updates on the front of the agreement between Western countries and Iran and the production cut that OPEC countries may start soon.

As for the economic calendar, in the afternoon, investors will focus on the ADP Nonfarm Employment Change and crude oil stocks in the United States, as well as Canadian GDP.

EURUSD, M15

The EURUSD broke downward the most significant support area this morning and dropped to the following support between the daily LVN and the W-1 POC. From a technical point of view, as long as prices remain above the W-1 POC, a pullback to the W-1 VAH can be expected. However, the most likely scenario, especially if prices break the 0.9972 mark downward, remains a continuation of the drop towards the W-1 VAL. On the upside, prices must probably overcome and consolidate above the current weekly VAH to invert the current trend.

Main intraday support areas where to look for long trades in case of bullish candlestick pattern or short trades in case of bearish candlestick pattern: 0.9982-0.9972, 0.9943.

Main intraday resistances areas where to look for short trades in case of bearish candlestick pattern or long trades in case of bullish candlestick pattern: 1.0021-1.0027, 1.0036, 1.0076.

S&P500, M30

The S&P500 continues its decline after Powell’s speech at Jackson Hole last week. From a technical point of view, the most important intraday support area is the uncovered weekly POC around the 3956 mark. In contrast, the current weekly VAH is the most significant intraday resistance area. As long as prices remain above the current weekly POC and the uncovered POC, the most likely scenario is a rebound to target the 4034 mark again. On the flip side, if prices succeed in breaking the main support downward, the following support could be in the 3930 area.

Main intraday support areas where to look for long trades in case of bullish candlestick pattern or short trades in case of bearish candlestick pattern: 3983, 3967, 3956, 3930.

Main intraday resistances areas where to look for short trades in case of bearish candlestick pattern or long trades in case of bullish candlestick pattern: 4034, 4084.

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