THE LONDON OPENING 08-09-2022

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THE LONDON OPENING 08-09-2022

EUROPEAN INDICES OPENED ABOVE PARITY AFTER A MAINLY POSITIVE ASIAN SESSION; INVESTORS’ EYES ARE ON THE CRUCIAL ECB MEETING.

European stocks opened above par this Thursday after a mostly positive Asian session in the wake of yesterday’s Wall Street close. The Nikkei index gained 2.31 %, the ASX200 gained 1.77%, and the ChinaA50 gave up only 0.20%. The first part of today’s European session will likely be one of caution, with all investors awaiting this afternoon’s ECB meeting. The central bank will raise interest rates sharply to combat inflation. Predictions are for a 75 bp increase, but the chances remain for a smaller 50 bp increase. Another appointment to which investors will turn their attention will be Powell’s speech, also scheduled for this afternoon. Earlier yesterday, two other FED officials (Vice President Brinard and Cleveland FED President Mester) confirmed that the rate hike policy will continue throughout 2023 and that they do not expect any rate cuts before 2024. Once again, therefore, the hawkish attitude prevails.

Elsewhere, the WTI tries to recover, for the moment with little success, from yesterday’s heavy thud (-5.69%), with quotations having returned to the January 2022 level; the major cryptos are stable, with the BTC and ETH trading close to 19000 and 1600, respectively; On the currency front, after making a new intraday high yesterday, the dollar index closes negative in the 109.5 area.

As for the macroeconomic calendar, investors will focus, as mentioned above, on the ECB meeting and Powell’s words, as well as Initial Jobless Claims and crude oil stocks in the US.

EURUSD; M15

The EURUSD rose strongly yesterday during the US session after holding the main intraday support area between the current weekly VAL and the 0.9977 mark. It is trading above the current week’s Value Area, which could be a positive bias for the day. From a technical point of view, the most significant intraday support area is the W-2 POC & W-1 VAL. In contrast, the most crucial intraday resistance area is the W-1 POC (psychological level of 1.0000). As long as prices remain below the resistance area, a pullback to the primary support is expected. On the other hand, if prices break the resistance area upward, a stretch toward the W-2 VAH and the W-1 VAH becomes the most likely scenario.

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: 0.9975, 0.9945, 0.9908.

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: 1.0000, 1.0023, 1.0040.

WTI, M15

The WTI fell sharply yesterday and is currently trading far below the current week’s Value Area, which could be a negative bias for today. From a technical point of view, the most important intraday support area is the yearly LVN around the 80.65 mark. In contrast, the current weekly VAH is the most significant intraday resistance area. As long as prices remain below the main resistance (particularly below the 82.72 mark), the most likely scenario is a continuation of the downtrend to target the yearly LVN. On the other hand, if prices break the resistance upward, a stretch towards the W-1 VAL is expected, with intermediate resistance around the 84.86 mark.

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: 80.65.

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: 82.72, 83.60, 84.86, 85.99.

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