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Matteo Marchetti Market Strategist
Analysis, Market Analysis | August 10, 2022

THE LONDON OPENING 10-08-2022

EUROPEAN STOCKS OPENED SLIGHTLY LOWER AFTER A NEGATIVE ASIAN SESSION ON THE DAY OF THE KEY CPI US DATA; CHINESE CPI RESULTED AT 2 YEAR HIGH BUT LOWER THAN EXPECTED.

European equities start this Wednesday moderately lower, with no significant movements expected at the opening and following a negative Asian session, with the ChinaA50 index giving up 1.77%, the ASX 200 0.53% and the Nikkei 0.63%. As we have remembered for days, volumes are decreasing as it almost naturally happens in the summer period. At the same time, investors are waiting for today’s critical data to take market positions.

Meanwhile, Chinese inflation returned to a two-year high, with the CPI (MoM) coming in at 0.5%, confirming expectations, but up from the previous -0.2%. On the other hand, the CPI (YoY) came in at 2.7%, against expectations of 2.9% and up from the previous reading of 2.5%. The Chinese central bank’s inflation target remains at 3%.

Regarding the macroeconomic calendar, the US CPI  and Crude Oil Inventories will be released today.


EURUSD, M15

The EURUSD erased almost yesterday’s gains during the US session after the pair could not consolidate over the W-1 POC and dropped to the first support around the W-2 VAH. It then started a sideways trend slightly below the 1.0214 mark and failed to come back above it three times. Currently, the most critical intraday resistance is the W-2 VAH, while the most important intraday support is the D-1 HVN. From a technical point of view, as long as prices remain below the resistance area, the most likely scenario is a drop toward the W-1 VAL, especially if prices can break the 1.0205 mark downward. On the other hand, if prices can consolidate above the resistance area, another stretch attempt to the W-1 POC is expected.

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: 1.0205, 1.0181, 1.0155.

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: 1.0214, 1.0234, 1.0266.

WTI, M15

The WTI continues to remain under pressure below 90$ per barrel. Currently, it is fighting around the W-1 VALwith a movement that could be just a pullback before the continuation of the downtrend started yesterday during the US session. From a technical point of view, as long as prices remain below the W-1 VAL, the most likely scenario is a continuation of the trend towards the current weekly VAL, with intermediate support around the 87.82 mark. On the other hand, if prices overcome the 89.08 mark again and retrieve the current weekly POC, they could target the current weekly VAH.

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: 87.82, 87.51, 86.62.

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: 89.08, 89.61, 90.33, 91.07.

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