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Matteo Marchetti Market Strategist
Analysis, Market Analysis | July 4, 2022

THE LONDON OPENING 04-07-2022

EUROPEAN STOCKS OPENED AROUND PARITY IN THE WAKE OF A MIXED ASIAN SESSION; LOW TRADING ACTIVITY IS EXPECTED DUE TO THE 4TH JULY HOLIDAY IN THE US

European equities opened around parity this Monday after a mixed Asian session and ahead of a closure trading day in the US due to the 4th of July holiday (Independence Day). Precisely because of this holiday, most capital will be missing from the market, and no significant movements are expected on most assets.

Fears of more lockdowns are again growing in China after covid cases increased in some eastern provinces of the country. At the same time, oil prices continue to come under pressure with the worsening political situation in Libya, strikes by some Norwegian workers, and OPEC’s failure to increase production.

Regarding the macroeconomic calendar, no notable data will be released today apart from the European PPI. Several ECB members’ speeches are awaited this afternoon.


EURUSD, M15

After a volatile week last week, the EURUSD is trading inside the W-1 Value Area but below its POC, and this could be considered a slightly negative bias for today. From a technical point of view, prices are ranging in a tight zone between the most significant intraday support and resistance. The main support is around the W-3 VAL, and the main resistance is around the 1.0454 mark, because both W-3 POC and W-1 POC are there. If prices can break the main resistance area upward, they could target the next resistance around the W-3 VAH. On the other hand, should prices break the intraday support, the most likely scenario is a continuation of the drop until the lower support between the W-1 VAL and the LVN.

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: 1.0415, 1.0383-1.0376.

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: 1.0454, 1.0498.

GBPUSD, M15

The Cable followed a very similar pattern to the EURUSD. It is trading inside last week’s Value Area and is trying to recover the W-1 POC, the main intraday resistance area. Should prices break the resistance upward, the most likely scenario is a continuation of the current short-term uptrend to target higher resistance around the W-3 POC and the area 1.2226-1.2240 in extension. On the flip side, as long as prices remain below the W-1 POC, the most likely scenario is a continuation of recent drops to target the main intraday support around the weekly LVN. Then, in case of a breakout, prices could also target lower support around the 1.2030 mark.

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: 1.2096, 1.2030-1.2020.

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: 1.2132, 1.2176.

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