US OPENING BELL 21-12-2022

[PocketOption]

US OPENING BELL 21-12-2022

EUROPEAN EQUITIES EDGE HIGHER AT MID-SESSION FUELED BY A BETTER-THAN-EXPECTED GFK CONSUMER CLIMATE DATA IN GERMANY; INVESTORS’ FOCUS SHIFTED ON CANADIAN CPI, WHILE THE VOLATILITY CONTINUED TO DECREASE FROM THE DECEMBER 13TH HIGH.

Major European stocks are up this morning, although volumes remain low, and there is no clear direction for the market. Currently, the Dax is gaining 0.81%, the Cac40 1.11% and the Eurostoxx 0.99%.

This morning, GFK’s report on German consumer climate improved market sentiment, which came in better than expected at -37.8 (against expectations of -38) and still improving for the fourth month in a row. Similarly, in Great Britain, the CBI (Confederation of British Industries) reported that retail sales unexpectedly improved in December, although it already forecasts a further decline in early 2023.

Meanwhile, Canadian consumer sales data came out yesterday, which beat expectations on an annual basis but fell more than expected on a monthly basis. Today, traders’ attention shifts to the inflation data, which may or may not bring confirmation on the BOC’s next moves. Up to this point, the central bank has been more dovish than the Fed, but it could easily change tones if inflation starts to take root in the economy.

Elsewhere, the continued decline in volatility in the US equity market is worth noting, with the Vix trading at its lowest level since 6 December after retracing from the relative highs reached last week on the release of the US inflation figure. WTI also traded slightly higher after yesterday’s preliminary inventory data (to be confirmed this evening) showed an improvement from the last survey, still signalling sustained demand.

As for the economic calendar, investors will focus today on the Canadian inflation data and existing home sales and crude oil inventories in the US.

EURUSD, M15

As per the previous analysis, the EURUSD continues to trade in the horizontal channel in a sideways trend. The better way to trade these setups is by finding short opportunities around the most significant intraday resistance area (W-1 VAH) and long opportunities around the most considerable intraday support area (between the 1.0612 mark and the W-1 POC). From a technical standpoint, we could assist in a bullish or bearish stretch if prices break the resistance or the support, respectively. On the upside, the following resistance could be the yearly HVN, while on the downside, the next support could be 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: 1.0612-1.0588, 1.0545.

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: 1.0650, 1.0730.

S&P500, M30

The S&P500 successfully broke out the most significant intraday resistance area (now support, between the LVN and the 3835 mark) and retested it several times. From a technical point of view, as long as prices remain above the support, the most likely scenario is a stretch to the 3869 mark and the W-2 VAL in extension. On the flip side, another downward breakout of the support could add more pressure to prices and pave the way for a drop toward the 3765 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: 3835-3819, 3765.

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: 3869, 3892.

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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Source: US OPENING BELL 21-12-2022