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Matteo Marchetti Market Strategist
Analysis, Market Analysis | August 9, 2022

US OPENING BELL 09-08-2022

EUROPEAN STOCKS EXTENDED LOSSES AHEAD OF THE US OPENING BELL, WHERE THE THREE MAJOR INDICES ARE EXPECTED TO OPEN MARGINALLY LOWER; GEOPOLITICAL TENSIONS INCREASE

European shares increased their losses in the first half of the session: the Dax traded at -0.89%, the Eurostoxx at -0.74%, while the FTSE100 remained at parity. The three major US indices are expected to open in slightly negative territory. Trading volumes remain subdued, however, with investors waiting for tomorrow’s US CPI data for their first assessments of the Fed’s next moves before taking a position.

Meanwhile, weighing on market sentiment is the rise in geopolitical tensions with the Russia-Ukraine conflict threatening to lead to a nuclear accident at the Zaporizhzhia nuclear power plant on the one hand and Taiwan claiming that China’s military exercises in the area are simply an excuse and are actually preparations for an invasion of the island.

Regarding the macroeconomic calendar, no notable data will be released today apart from the US EIA Short-Term Energy Outlook, as already mentioned.


EURUSD, M15

The EURUSD rose strongly during the first part of the European session and, breaking the W-2 VAH with a long-bodied candle, reached the W-1 POC. It also tried to break the W-1 POC resistance area but posted two bearish engulfing and started to post lower lows and lower highs. Currently, as soon as prices remain below the W-1 POC, the most likely scenario is a drop towards the W-2 VAH and eventually to the W-1 VAL. On the other hand, if prices come back above the W-1 POC and consolidate above it, another rise toward the W-3 VAH 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: 1.0214, 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: 1.0234, 1.0266.

S&P500, M15

The S&P500 tried yesterday to overcome the very significant resistance area around the yearly LVN, posting a fake breakout of the 4169 mark. After that, it dropped below the major support given by the W-1 VAH and remained below that level till the closure. Currently, it is trading in a sideways trend between the W-1 VAH and the intermediate support around the 4130 mark. From a technical point of view, if prices break the support downward, the following target could be the W-1 POC. On the other hand, if prices succeed in overcoming the W-1 VAH, there is a high probability that the index will try to stretch again above the yearly 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: 4130, 4117, 4109, 4079.

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: 4153, 4169.

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