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Matteo Marchetti Market Strategist
Analysis, Market Analysis | September 28, 2022

THE LONDON OPEN 28-09-2022

EUROPEAN EQUITIES OPENED LOWER AFTER A NEGATIVE ASIAN SESSION; ENERGY CRISIS CONCERNS INCREASED, WHILE GERMAN CONSUMER CLIMATE HIT A RECORD LOW.

All the continent’s main indices opened the day on a negative note after Wall Street closed the day for the sixth consecutive time in the red (the S&P hit an annual low) and after an equally negative Asian session, with the ChinaA50 index losing 0.66%, the ASX200 0.53% and the Nikkei 1.50%. Weighing on investor sentiment remained the signs of a global recession and economic slowdown, combined with growing concerns over Europe’s energy crisis, after news of possible Russian sabotage of the Nord Stream pipeline spread yesterday, curtailing gas supplies to Europe. Another factor weighing on sentiment is undoubtedly the statements of the various central bank officials. They again warned that this hawkish attitude would last for a long time, contrary to what one might have thought a few months ago. This morning, the German GfK Consumer Climate has also been released, which came in at -42.5 against the expected -39 and thus marked a new historical negative recond, confirming that consumer confidence is also reaching worrying levels.

Elsewhere, WTI resumed its decline after yesterday’s strong performance (+2.33%), mainly because preliminary data on crude oil inventories (to be confirmed this evening with the official figure) were up, signalling a possible further slowdown in oil demand from the world’s largest consumer, the US.

As for the economic calendar, today, investors will focus on the scheduled speeches by Powell and Lagarde, as well as US data on crude oil inventories and pending home sales.


EURUSD, M15

The EURUSD hit another record low of around 0.9550 and is now trading around the main intraday support area, the 0.9449 mark. In contrast, the most significant intraday resistance area is between the current weekly VAL and the current weekly POC. From a technical point of view, as long as prices remain below the main resistance, further drops are expected towards the lower support around the 0.9450 mark. On the other hand, if prices break the resistance upward, a stretch to the W-1 VAL becomes the most likely scenario.

Main intraday support areas where to look for long trades in case of bullish candlestick pattern or short trades in case of bearish candlestick pattern: 0.9549, 0.9450.

Main intraday resistances areas where to look for short trades in case of bearish candlestick pattern or long trades in case of bullish candlestick pattern: 0.9600-0.9625, 0.9689.

GBPUSD, M15

The Cable is trading below the current weekly VAL, which can be considered a negative bias for today. From a technical point of view, the most significant intraday support is the LVN around the 1.0624 mark. In contrast, the most important intraday resistance is the zone between the current weekly POC and the current weekly VAH. A rebound to retest the resistance is expected if prices remain above the support. On the other hand, if prices break the support downward, a drop to the September 26 low becomes the most likely scenario.

Main intraday support areas where to look for long trades in case of bullish candlestick pattern or short trades in case of bearish candlestick pattern: 1.0624, 1.03.

Main intraday resistances areas where to look for short trades in case of bearish candlestick pattern or long trades in case of bullish candlestick pattern: 1.0781-1.0834, 1.0944.

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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