European equities opened lower this Thursday after a mixed Asian session, with investors realising after yesterday’s forum in Sintra, Portugal, that the central bankers’ commitment to reducing inflation is virtually unconditional. Therefore, a possible recession due to aggressive monetary policies seems to be a risk that major central banks around the world are willing to take to bring price levels under control.
Other than that, China’s manufacturing sector recovered, with the Manufacturing PMI data released in June showing a rise to 50.2 from 49.6 in May, the first expansion since February and the steepest pace in six months, as important economic hubs like Shanghai emerged from the “Zero Covid-19” policy lockdowns.
Regarding the macroeconomic calendar, French CPI and German Unemployment Rate are due to be released this morning. In contrast, this afternoon US Core PCE Price Index and Initial Jobless Claims will be published, among with the Canadian GDP. ECB’s President Lagarde will hold another speech this afternoon.
The EURUSD broke the most important intraday support (W-2 VAH), and after a pullback confirmed by the bearish engulfing highlighted, it dropped until the uncovered W-2 POC and beyond. It is currently fighting to come back above it, but with little success. From a technical point of view, the area of the W-2 POC is the most significant intraday support intraday. If prices break downwards, the most likely scenario is a continuation of the drop to target the W-2 VAL. On the other hand, should prices hold above it and consolidate, a deeper pullback to target higher resistances is expected. However, the short-term trend remains bearish, and on the upside, the pair should break many solid resistance areas before retrieving appropriately. The most important resistance area is between the W-1 VAL and the current weekly VAL. Other weaker resistances are the areas around the 1.0810 mark and the W-2 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: 1.0410.
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: 1.0481, 1.0492, 1.0509-1.0513.
The WTI dropped heavily yesterday, while investors are looking for other news from the OPEC+ meeting on possible production increases. From a technical point of view, the black gold dropped below the current weekly POC and is now trying to hold the most significant intraday support between the current weekly VAL and the W-1 VAH. Should prices hold it, the most likely scenario is a recovery of the current weekly POC with an intermediate resistance around the 109.6 mark. On the other hand, should prices break downward, they could find weaker support around the 106.94 mark but in case they also break the latter, another drop is expected to target the uncovered weekly POC around 103.
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: 107.40-107.58, 106.94, 103.10.
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: 109.60, 110.04.