US OPENING BELL 17-10-2022

[PocketOption]

US OPENING BELL 17-10-2022

EUROPEAN EQUITIES REMAIN LARGELY ABOVE PARITY AHEAD OF THE START OF THE US SESSION; IN THE UNITED KINGDOM, THE NEW CHANCELLOR BEGINS TO REVERSE HIS FISCAL PLAN ONCE AGAIN, WHILE THE GBP AND LONG-DATED BONDS SEEK TO MITIGATE SOME OF THE RECENT LOSSES.

European equities remain largely above par at mid-session, awaiting the opening of US cash. Currently, the Dax gains 1.04%, the Cac40 0.87% and the Eurostoxx 0.91%. These gains will have to be confirmed after the US opening. Still, investor sentiment certainly seems more positive than last week, especially after the new Chancellor of the Exchequer, Jeremy Hunt’s first words this morning. Although the actual speech will be in front of the House of Commons this afternoon, the new finance minister reiterated the changes to the UK’s new tax plan. From what we hear, the only thing that will remain the same as the mini-budget that had severely spooked the markets a few weeks ago is the cut to Stamp Duty and National Insurance; everything else will be scrapped, such as the 1% cut in the income tax rate or the energy prices set for two years (which will instead be fixed until April 2023 and then revised periodically). Today, in the absence of other cues offered by the macroeconomic calendar, the market’s attention will be focused mainly on the developments in the British fiscal affair. Therefore it will be interesting to follow more closely the markets most impacted by this type of policy, from the GBP, to the Gilt, via the British FTSE 100 index.

On the forex market, the Pound Sterling is posting the best performance among all currencies (+1.20%), while the FTSE100 remains within the average of the European indices’ gains (+0.89%). Lastly, the 30-year Gilt is rebounding strongly, currently up 9.88%.

As for the macroeconomic calendar, the only important data will be the New Zealand CPI, which will be published in the evening.

EURUSD, M15

The EURUSD tried to break the most crucial intraday resistance area upward but failed to confirm the breakout of the heights and dropped again below the area, signalling a strong seller’s presence on the market. From a technical point of view, the most important resistance and support areas from an intraday perspective remain the same, meaning the 0.9750 and the 0.9707 marks. As long as prices remain below the resistance area, the most likely scenario is a drop toward the support and the W-1 VAL in extension. On the other hand, if prices can overcome and consolidate above the resistance, a stretch to the W-2 POC is expected.

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: 0.9707, 0.9689, 0.9636.

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: 0.9749, 0.9800.

S&P500, M30

The S&P is trying to recover part of the last Friday’s losses and is now trading above the main intraday support area between the W-1 POC and the W-1 VAL. In contrast, the most critical intraday resistance area is the 3644 mark. As long as prices remain above the support, the most likely scenario is a continuation of the rise to target the resistance. A breakout of the resistance could lead prices to the W-2 VAL. Conversely, other drops are expected if prices break the support downward.

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: 3589-3573.

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: 3644, 3679.

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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