US OPENING BELL 31-10-2022

[PocketOption]

US OPENING BELL 31-10-2022

EUROPEAN STOCKS TRY TO RECOVER EARLY MORNING LOSSES; EU CPI ROSE MORE THAN EXPECTED, ADDING PRESSURE ON THE ECB REGARDING THE NEXT INTEREST RATE HIKES.

European stocks are trying to recover this morning’s losses and are trading in positive territory, with the Dax gaining 0.20%, the Eurostoxx 0.06% and the FTSE100 0.25%. In contrast, the Paris and Madrid stock exchanges remain below parity but contain declines. The surprising news of the morning was the European inflation data, which rose more than expected. Specifically, annual inflation came in at 10.7% against the expected 10.2%, marking a new all-time high. Also, on a monthly basis, the figure was the highest in 7 months at 1.5%. A new historical record was also marked by the core figure, i.e., the figure adjusted for the most volatile goods, which resulted in 5% against the forecast of 4.8%. All these data show a very clear situation for the market: inflation continues to run despite central banks’ efforts to contain it by raising interest rates. What is less clear, on the other hand, and evident from the market’s behaviour just after the release of this data, is when (and if) the monetary policy of the ECB and especially the FED might change over the next year. It seems that the market is reacting to a lesser extent than it did some time ago after these kinds of results, which may indicate that prices have already discounted much of the upcoming central bank hikes.

Meanwhile, on the FX market, the difficulties of the JPY continue. After the BoJ’s two interventions to curb the national currency’s fall, it resumed its decline, trading at the day’s lows (USDJPY at highs since last Tuesday in the 148 area). The market thus seems to be trying to force the BoJ to intervene on the exchange rate again. On the commodities front, on the other hand, the decline in crude oil continues (with WTI currently trading at -2.10 %) mainly due to the slowdown in China’s manufacturing sector, the world’s largest importer.

As for the macroeconomic calendar, after the European inflation data released this morning, no other notable data is expected to be released in the afternoon.

EURUSD, M15

The EURUSD broke the primary intraday support, the W-1 VAL. It then tried to retrieve the level, but sellers showed their power, pushing the price lower after posting the two bearish candlesticks pattern and the two lower lows. Since the breakout is confirmed, the most likely scenario remains a continuation of the drop to target the LVN around the 0.9903 mark and the W-1 VAH in extension. On the flip side, a notable rebound is expected to target higher resistances if the pair can retrieve and overcome the two highs without breaking the LVN to the downside.

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: 0.9903, 0.9848.

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: 0.9929, 0.9968, 1.0017.

S&P500, M30

The S&P500 is trading around the most significant intraday support area, between the LVN around the 3858 mark and the W-1 VAH. From a technical point of view, as long as prices remain above the support, the most likely scenario is a continuation of the rise to target the blue rectangle area in the medium term (which is the most important resistance area). On the other hand, if prices break the support downward, a drop toward the W-1 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: 3870-3858, 3840, 3791.

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: 3925.

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

The post US OPENING BELL 31-10-2022 appeared first on Key To Markets Blog.

Source: US OPENING BELL 31-10-2022