US OPENING BELL 8-12-2022

EUROPEAN EQUITIES HEAD FOR THE FOURTH CONSECUTIVE NEGATIVE DAY AHEAD OF THE US OPENING BELL; INVESTORS SHIFT INTO WAIT-AND-SEE MODE AHEAD OF THE NEXT CRUCIAL WEEK; THE BOC RAISED INTEREST RATE AS EXPECTED.

The opening bell is rung on the trading floor of the New York Stock Exchange (NYSE) to signify the start of the day's trading session.

Major European equities are heading for a negative close for the fourth consecutive day, pending the US opening, which as always, could be a game changer. Currently, the Dax is down 0.27%, the Cac40 0.10% and the Eurostoxx 0.19%.

However, investors remain in wait-and-see mode ahead of next week, which is relatively straightforward and evident by looking at the market movements, which were mostly small this week. The focus is shifting to the key monetary policy meetings of the Fed, BOE and ECB scheduled for the 14th and 15th of December. These meetings, followed by the US inflation figure to be released on Tuesday, the 13th, will bring much volatility to all the major markets. From the monetary policy decisions, we may get an even more precise idea of what monetary policy attitudes will be for the coming year.

Meanwhile, the latest central bank to raise interest rates was the BOC yesterday, which raised the rate to 4%, up 50bp and to levels not seen since the great financial crisis. There was little reaction to the USDCAD exchange rate, which closed at virtual parity yesterday.

Regarding the macroeconomic calendar, today, investors will mainly focus on initial jobless claims in the US and ECB President Lagardes scheduled speech.

EURUSD, M15

The EURUSD trades near the most interesting intraday resistance area, between the D-1 POC and the 1.0536 mark (yearly HVN). In contrast, the current weekly POC is the most significant intraday support area. From a technical standpoint, an upward breakout of the resistance could lead prices toward the upper part of the medium-term resistance (the one between the two blue lines on the chart). On the flip side, if prices fail to break the resistance, a drop toward the support and to the W-1 VAH becomes the most likely scenario.

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: 1.05, 1.0483, 1.0429.

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: 1.0524-1.0536, 1.0587.

S&P500, M30

The S&P500 found buyers around the current weekly POC this morning. The area between the W-1 VAL and the current weekly POC represents the most significant intraday support area. From a technical point of view, as long as prices remain above the support, the most likely scenario is a continuation of the rise toward higher resistances (W-1 POC, W-3 POC). On the other hand, a downward breakout of the support could lead prices toward the LVN around the 3890 (another weaker support is around the 3912 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: 3934-3938, 3912, 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: 3956, 3968.

Check below some acronyms of the key words:

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