US OPENING BELL 04-11-2022

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US OPENING BELL 04-11-2022

EUROPEAN STOCKS CONSOLIDATE GAINS AHEAD OF THE US OPENING BELL; SENTIMENT IMPROVES THANKS TO CHINESE NEWS, WHILE TODAY’S US LABOUR MARKET DATA CAME IN MIXED.

European stocks consolidate mid-session gains as they await the opening of Wall Street, which is expected to be positive. Currently, the Dax advances 2.33 %, the Cac40 2.59% and the Eurostoxx 2.53%.

As mentioned this morning, sentiment has improved thanks to the news coming out of China, which has brought to the fore speculation about a possible new change of course by the government regarding its anti covid policy. In this regard, more news is expected tomorrow from the press conference called by Chinese health authorities.

In the United States, Musk told employees of his decision to cut about half of the company’s workforce (Twitter). At the same time, labour market data, on the other hand, were mixed, but certainly not enough to convince the FED to backtrack on monetary policy.

NFP came in higher than expected but lower than the previous survey, while unemployment surprised in the negative by coming in at 3.7% against the 3.6% expected. Market reaction was immediate, equity up, dollar down. After Powell’s hawkish words, the reason is quickly explained: investors see that the labour market is contracting and interpret this sign as a possible slowdown in the Fed’s monetary tightening on the horizon.

Elsewhere, WTI oil trades higher at +4.66%, thanks again mainly to news from China, a significant importer of crude oil, which could boost demand.

EURUSD, M15

The EURUSD rose strongly after the publication of the US labour market data. After breaking the resistance area (LVN) to the upside, it is now trading close to the new most significant intraday resistance area, the current weekly POC. From a technical point of view, as long as prices remain below the resistance, the most likely scenario is a drop to retest the W-2 VAH. If prices break the W-2 VAH downward, a bearish V-retracement could occur. On the flip side, a bullish breakout of the resistance could lead prices to the upper area, the W-1 VAL.

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: 0.9848, 0.9795, 0.9763.

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: 0.9830-0.9840, 0.9929.

S&P500, M30

The S&P showed a lot of volatility during the news and is now trading around the primary intraday support between the W-2 VAH and the Daily LVN. From a technical point of view, if prices can consolidate above it after the US opening, a stretch to the 3791 mark is the most likely scenario. On the other hand, a bearish breakout of the support area could lead prices to the uncovered POC around the 3685 mark.

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: 3738-3745, 3685.

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: 3791, 3840.

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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