US OPENING BELL 07-10-2022

[PocketOption]

US OPENING BELL 07-10-2022

EUROPEAN STOCKS TRY TO STAY ABOVE PAR AHEAD OF THE U.S. SESSION; TRADING REMAINS THIN AT THE MOMENT, WITH INVESTORS WAITING FOR NFP RELEASE BEFORE TAKING A POSITION.

European stocks remain little moved this morning ahead of the U.S. session, which will be preceded by the release of crucial NFP and U.S. unemployment data. The Dax currently gives up 0.19%, while the Cac40 gains 0.16% and the Eurostoxx 0.06%. Most investors will likely wait for the data release to take market positions. In fact, after Wednesday’s positive ADP data and yesterday’s worse-than-expected initial jobless claims (219K vs 203K), they are waiting to see what the outcome of this key indicator will be. Suppose NFP and unemployment turn out to be in line with expectations or better. In that case, the rally that has characterized the last few days (mainly due to short position cover-ups and not driven by true fundamentals) could be immediately reversed. Conversely, worse-than-expected data could cause all risk-on assets to catch their breath. Meanwhile, before the U.S. stock market closed yesterday, as Bloomberg reports, a trader placed a “bet” buying 50000 options on the Vix for a value of about $1 million, predicting that the index could reach the 150 level by March 2023 (the highest ever recorded by the index during the GFC was in the 89 area). This is but further confirmation that market sentiment remains strongly bearish.

On other fronts, i.e., the F.X. and crypto markets, there are also no significant movements to report for the time being. WTI oil, on the other hand, continues its run and trades at +1.1%, and today depending on the outcome of the U.S. data, it could try to regain the $90 per barrel mark firmly.

As for the macroeconomic calendar, as repeatedly mentioned, investors’ attention today will be almost exclusively on NFP and U.S. unemployment, as this data will be the only real market mover today.

EURUSD, M15

The EURUSD setup did not change that much since this morning. Prices, after posting a bullish engulfing on the most significant intraday support area, the current weekly VAL, rose to the most crucial intraday resistance area, the current weekly POC. However, they failed to consolidate above it. From a technical point of view, as long as prices fail to overcome the resistance, the most likely scenario is a continuation of the drop to target lower supports. On the flip side, if pieces can retrieve the current weekly POC and break the W-2 POC upward, a stretch to the current weekly VAH around the 0.9910 mark is expected. In any case, the performance of EURUSD will depend heavily on U.S. labour market data.

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: 0.9765, 0.9743, 0.9689.

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: 0.9802, 0.9838, 0.9910.

S&P500, M30

The S&P500 is still trading below the most significant intraday resistance between the LVN and the W-2 VAL, signalling the high presence of sellers in that area. In contrast, the most crucial support area is the current weekly VAL around the  3723 mark. From a technical point of view, as long as prices remain below the resistance, the bearish scenario remains the most likely, with prices that could approach lower supports. On the other hand, if prices can consolidate above the resistance, a stretch to the weekly LVN around the 3829 mark is expected. Even in this case, the index’s performance will depend heavily on U.S. labour market data.

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: 3723, 3689, 3641.

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: 3749-3763, 3829.

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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