CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

European Open: EUR/USD grinds higher ahead of EU GDP and US retail sales

Article By: ,  Market Analyst

Asian Indices:

  • Australia's ASX 200 index rose by 13.8 points (0.19%) and currently trades at 7,106.80
  • Japan's Nikkei 225 index has risen by 87.79 points (0.33%) and currently trades at 26,634.84
  • Hong Kong's Hang Seng index has risen by 445.45 points (2.23%) and currently trades at 20,395.66
  • China's A50 Index has risen by 145.55 points (1.11%) and currently trades at 13,304.88

 

UK and Europe:

  • UK's FTSE 100 futures are currently up 27.5 points (0.37%), the cash market is currently estimated to open at 7,492.30
  • Euro STOXX 50 futures are currently up 29 points (0.79%), the cash market is currently estimated to open at 3,714.34
  • Germany's DAX futures are currently up 113 points (0.81%), the cash market is currently estimated to open at 14,077.38

 

US Futures:

  • DJI futures are currently up 74 points (0.23%)
  • S&P 500 futures are currently up 75 points (0.61%)
  • Nasdaq 100 futures are currently up 14.25 points (0.36%)

 

Sentiment improved overnight as investors absorbed the positive headlines surrounding Shanghai scaling back their lockdown restrictions. The Hang Seng and HSCE were top performers and rose ~2.5%.

The RBA minutes revealed that the board discussed 15, 25 and 40-bps hike at their last meeting and hinted that a 40-bps hike could be on the cards given the high levels of inflation and strong employment situation. AUD and NZD were the strongest majors and JPY was the weakest during a mild risk-on session.

Jerome Powell is set to speak at 19:00 GMT, so traders will be seeking further clarification for futures rate hikes. US data includes retail sales at 13:30 an industrial production at 14:15. But first we have flash GDP and employment data from the Eurozone at 10:00, which makes EUR/USD an ideal pair to monitor this session.

 

EUR/USD (4-hour): Grinding higher towards resistance

The strong downtrend on EUR/USD stabilised above the 2017 low after some ECB members have called for up to three rate hikes. But markets need to hear hawkish comments from the ultra-dovish ECB President, Christine Lagarde. She speaks four times this week at G7 meetings, and Jerome also Powell speaks tonight – which leaves plenty of opportunity for volatility on the euro.

EUR/USD is grinding higher on the 4-hour chart, although price action appears to be corrective. Our bias remains bearish beneath 1.0500 and we’re looking for evidence of a swing high around the 1.0450/68 or 1.0489 – 1.0500 resistance zones. Our downside target is the 1.0300 – 1.0340 support zone.

 

FTSE: Market Internals

The FTSE 100 pulled back towards (and stalled just above) our 7350 support zone mentioned in yesterday’s report, before reversing higher. Closing above its 50-day eMA and at a 5-day high, we retain a bullish bias today. The initial target is 7500, a break above which brings 7600 into focus.

 

FTSE 350: 4154.12 (0.63%) 16 May 2022

  • 175 (50.00%) stocks advanced and 166 (47.43%) declined
  • 6 stocks rose to a new 52-week high, 5 fell to new lows
  • 26.29% of stocks closed above their 200-day average
  • 89.43% of stocks closed above their 50-day average
  • 15.43% of stocks closed above their 20-day average

 

Outperformers:

  • + 4.62% - Fresnillo PLC (FRES.L)
  • + 4.44% - Apax Global Alpha Ltd (APAX.L)
  • + 4.28% - TP ICAP Group PLC (TCAPI.L)

 

Underperformers:

  • -7.43% - Kainos Group PLC (KNOS.L)
  • -7.27% - Network International Holdings PLC (NETW.L)
  • -5.68% - Diploma PLC (DPLM.L)

 

Up Next (Times in GMT)

 

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