US OPENING BELL 20-01-2023

[PocketOption]

US OPENING BELL 20-01-2023

EUROPEAN EQUITIES TRY TO PUSH HIGHER AHEAD OF THE US OPENING; RETAIL SALES DROP IN THE UK, WHILE CENTRAL BANKS OFFICIAL CONTINUE TO HIGHLIGHT THAT QT IS STILL NECESSARY TO TAME INFLATION.

The main European stock markets are up this afternoon in anticipation of the opening of Wall Street. Currently, the Dax gained 0.38%, the Cac40 0.66% and the Eurostoxx 0.55%.

Market sentiment is trying to turn positive after two days of declines, also helped by the German PPI released in the morning lower than expected. However, buyers do not seem to have the necessary strength to revive prices with vigour, also due to the words of various central bank officials who spoke at the WEF in Davos and elsewhere, reiterating the rhetoric we have become accustomed to for some time now. “inflation remains too high albeit down from its peak” and “there is still a long way to go to solve the problem”. The rhetoric continues to be hawkish, but at the same time, the market does not believe the words of the monetary policymakers.

Yesterday, however, the ECB’s minutes from the December meeting confirmed that many members were in favour of another 75bp increase instead of the 50bp as was the case. Meanwhile, lower-than-expected retail sales data came in from the UK this morning. In particular, the monthly figure registered -1% against -0.5% expected, while the annual figure stood at -5.8% against -4.1% expected.

Elsewhere, WTI was up despite the poor inventory data released yesterday (8.408M vs -0.593M) and thanks in large part to the fact that various reports showed that demand for crude oil remains at its highest level in nine months and the fact that ongoing reopenings in China should further boost demand.

Regarding the macroeconomic calendar, today, investors will focus on Canadian retail sales, US existing home sales, and various scheduled speeches by ECB and Fed members.

EURUSD, M15

The EURUSD dropped below today’s most crucial intraday resistance, the current weekly POC. In contrast, the most important intraday support is the current weekly VAL, then the 1.0772 mark (a weekly LVN). From a technical point of view, as long as prices remain below the resistance, the most likely scenario is a continuation of the drop toward the two lower supports. On the flip side, if prices retrieve the current weekly POC, they could attempt a stretch toward the 1.0866 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: 1.0802, 1.0772, 1.0743.

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: 1.0840, 1.0866.

S&P500, M30

The S&P500 continues to trade below the most significant intraday resistance area, between the D-2 POC and the W-1 VAL. From a technical point of view, as long as prices remain below that area, the most likely scenario is a continuation of the drop toward the W-2 VAH. On the other hand, we should wait until the index retrieves the resistance area to see an inversion attempt of the short-term trend. At that point, a move upward can become the most likely scenario with targets around the W-1 POC.

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: 3855-3853.

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: 3921-3927, 3944, 3978.

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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