THE LONDON OPENING 02-09-2022

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THE LONDON OPENING 02-09-2022

EUROPEAN EQUITIES OPENED HIGHER DESPITE A NEGATIVE ASIAN SESSION; THE USD HIT A NEW RECORD HIGH, WHILE INVESTORS FOCUS TODAY WILL BE ON THE US NON-FARM PAYROLL.

European stocks begin this Friday higher despite another disappointing Asian session, where the ChinaA50 index lost 0.77%, the ASX200 0.25%il and the Nikkei 0.08%. Lockdowns imposed by the Chinese government in an attempt to curb new Covid cases and the electricity shortages in parts of the country resulting in a slowdown in manufacturing activities continue to weigh on the region. Today’s European morning is likely to be cautious, with most traders waiting for the U.S. Non-Farm Payroll data to take a firm stance on the market. Estimates call for 300K new jobs in August compared to 528K in July. Suppose the figure turns out better than expected. In that case, it could bring volatility to the markets and weigh especially on the stock market and the dollar, as it would be seen as another incentive for the FED to continue its rate hike policy.

Meanwhile, more positive U.S. data came out yesterday. Specifically, initial claims for unemployment benefits came in at 232K against expectations of 248K, while the ISM Manufacturing PMI came in at 52.8 against 52 expected. These data caused the U.S. dollar to jump again, marking a new high against the euro since June 2002. On the commodities front, on the other hand, worth noting is the attempted rebound of WTI, which currently trades at +1.77%after three consecutive days of sharp declines, while waiting for OPEC+ to meet next week to decide on a possible production cut.

As for the macroeconomic calendar, investors will focus mainly on NFP and U.S. unemployment today.

EURUSD, M15

The EURUSD fell strongly after the US ISM Manufacturing PMI yesterday. From a technical point of view, it dropped below the primary intraday support between the current weekly VAL and the W-1 POC, which has now become the most critical resistance area. As long as prices remain below the resistance area, the most likely scenario is a continuation of the decline to target again the W-1 VAL and the 0.9904 mark in extension. On the other hand, if prices can retrieve and consolidate above the main resistance area, a stretch to retest the W-1 VAH & current weekly POC is expected.

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: 0.9943, 0.9904.

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: 0.9975, 0.9984, 1.0021.

WTI, M15

The WTI is trying to recover from recent lows slightly below 86$. The black gold is now fighting around the major intraday resistance area, the D-1 VAH. From a technical point of view, as long as prices remain below the resistance area, a continuation of the drop to target the W-2 VAL and the yearly VAL is expected. On the upside, prices have to face a lot of resistances, but in case of an upward breakout of the 88.04 mark, a stretch to the current weekly VAL becomes the most likely scenario (with the W-2 POC as intermediate resistance).

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: 86.94, 86,31, 85.

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: 88.04, 88.53, 88.99.

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