US OPENING BELL 07-12-2022

[PocketOption]

US OPENING BELL 07-12-2022

EUROPEAN SHARES EDGE LOWER AHEAD OF THE US SESSION; THE EUROPEAN GDP BEATS EXPECTATIONS, WHILE THE WTI CONTINUES ITS DECLINE AMID RECESSION FEARS.

Major stocks on the Old Continent are down this Wednesday. Before Wall Street opened, the Dax gave 0.41%, the Cac40 0.40% and the Eurostoxx 0.44%.

Thus, the confirmation from China regarding the final (first concrete) relaxation of anti-covid measures in the country was not enough to improve market sentiment. Even the good European GDP figure, which this morning beat expectations by coming in at 0.3% versus the expected 0.2% (quarterly figure) and 2.3% versus the expected 2.1% (annual figure), failed to do so. Indeed, it seems that investors, now that the likely stance to be taken by the Fed and ECB at next week’s meetings has become more evident, are back to focusing on the fear of a recession in the coming year.

Indeed, US indices have practically wiped out all the gains they made last week in three days, and the US dollar also seems to have slowed its descent slightly. For the same reasons, the WTI also recorded a new period low just below $73 per barrel.

As for the macroeconomic calendar, today, investors will mainly focus on the BOC interest rate decision, US crude oil stocks and Japanese GDP.

EURUSD, M15

The EURUSD posted yesterday a double-top pattern around our major resistance (D-2 VAL) and dropped below the primary support around the W-1 VAH. As for today, it retrieved the support and is trading around the most significant intraday resistance area, the current weekly POC. In contrast, the most critical intraday support is the W-2 VAH. From a technical standpoint, as long as prices remain below the current weekly POC, the most likely scenario is a drop toward the support. On the other hand, if prices break the resistance, another attempt to overcome the medium-term resistance between 1.0525 and 1.0585 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: 1.0483, 1.0429, 1.0404.

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: 1.0497, 1.0525-1.0585.

S&P500 M30

The S&P dropped heavily and erased almost all last week’s gains. It dropped below several support areas (W-1 POC, W-3 VAL, W-1 VAL). As for today, the most significant intraday support is the LVN around the 3890 mark. In contrast, the most critical resistance area is the 3917 mark. From a technical point of view, as long as prices remain below the resistance, a drop towards the LVN is the most likely scenario. On the flip side, a breakout of the resistance could lead prices back to the W-1 VAL. To have a new bullish trend, prices should break the W-1 POC to the upside.

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: 3890.

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: 3917, 3938, 3946, 3956.

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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