Major European indexes remain in negative territory ahead of the opening of the U.S. session, with the Dax giving up 0.73%, the Cac40 0.71% and the Eurostoxx 0.88%. In the morning, European PMI data largely disappointed expectations. The German Composite PMI came in at 45.7 versus 45.9 expected, while the Services PMI was 45 versus 45.4. Similarly, these two data also disappointed expectations in Italy, France and Spain, while in the United Kingdom, they were above expectations. Market volatility remains high but still below the 30 level (both in terms of the Vix and the Vstoxx). As long as it stays within this limit, one might even expect a continuation of this rally in a still bearish market. Much of today’s intraday movement will, in any case, probably be decided by the U.S. opening, as after yesterday’s negative labour market data, investors are anxiously awaiting the one on ADP (which is usually a good predictor of NFP) to see if there are indeed more concrete signs that the Fed’s monetary policy is certainly beginning to show its first effects on the economy.
On the FX market front, the dollar is trying to recover the losses of the last few days, while on the commodities front to be reported is the decline in the two main precious metals, gold and silver, after solid gains in the last two sessions. On the other hand, oil continues to climb, with much volatility expected on the instrument at the end of today’s OPEC+ meeting.
Regarding the macroeconomic calendar, as already mentioned, the most important data of the day will be the change in nonfarm payroll employment, the ISM nonmanufacturing index and crude oil stocks in the United States.
The EURUSD failed to consolidate over the primary intraday support (around the W-2 VAH), and after breaking the area downward, it started to drop towards the LVN around the 0.9907 mark. Currently, the LVN has become the most interesting support area for the rest of the day. In contrast, the most significant resistance area is now the W-2 VAH. From a technical point of view, if prices drop below the LVN, a continuation of the trend toward the lower LVN is expected. On the flip side, a rebound to retest the resistance becomes the most likely scenario if the pair will post a bullish candlestick pattern around the support.
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: 0.9907, 0.9866.
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: 0.9967, 1.0007, 1.0029.
The S&P500 broke the most critical resistance area upward yesterday and consolidated above it without falling below the LVN for the rest of the session. Even if this movement could be considered a positive bias for today, for the index to be able to stretch to the higher resistance (the weekly LVN around the 3829 mark) it would need to hold above support between the 3763 and the 3749 marks during the opening phase of U.S. cash. On the flip side, if prices break the LVN around the 3749 mark downward, a drop to retest the W-1 VAH 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: 3749-3763, 3689.
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: 3829, 3876.
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-2= two days ago
D-3= three days ago