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.
Open account
☰
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.
Open account
✖

European Open: EUR/USD stalls at resistance ahead of US inflation

Article By: ,  Market Analyst
September 30, 2022 6:23 AM

Asian Indices:

  • Australia's ASX 200 index fell by -68.2 points (-1.04%) and currently trades at 6,486.80
  • Japan's Nikkei 225 index has fallen by -591.48 points (-2.24%) and currently trades at 25,830.57
  • Hong Kong's Hang Seng index has fallen by -53.1 points (-0.31%) and currently trades at 17,112.77
  • China's A50 Index has fallen by -40.71 points (-0.31%) and currently trades at 12,915.58

 

UK and Europe:

  • UK's FTSE 100 futures are currently down -12 points (-0.17%), the cash market is currently estimated to open at 6,869.59
  • Euro STOXX 50 futures are currently down -1 points (-0.03%), the cash market is currently estimated to open at 3,278.04
  • Germany's DAX futures are currently down -23 points (-0.19%), the cash market is currently estimated to open at 11,952.55

 

US Futures:

  • DJI futures are currently down -59 points (-0.2%)
  • S&P 500 futures are currently down -2.25 points (-0.02%)
  • Nasdaq 100 futures are currently down -2.5 points (-0.07%)

 

 

China’s service sector running out of steam

China’s manufacturing sectors expanded at a snail’s pace in September, according to the National Bureau of Statistics (NBS). But it is the first month in three (or second in seven) that the sector hasn’t contracted. Meanwhile the Caixin survey – which is run privately – fell to a 4-month low of 48.1 to show contraction. Furthermore, the NBS services PMI barely expanded at 50.6which shows further deterioration for the world’s second largest economy.

USD/CNH rose comfortably back above 0.7100 after the data, but has since given back around half of the day’s gains. The pair remains within a corrective phase after the dollar began to soften earlier this week, and the PBOC have been vocal about supporting the yuan.

The USD is currently the strongest major currency whilst CAD, AUD and NZD are the weakest.

 

US inflation is the main focus for traders today

UK GDP is released at 07:00 BST and expected to contract by -0.1% q/q, which would be its first contraction since Q3 2021. And we may need to get used to contracting GDP with the new UK budget being supported by the government despite the market backlash.

German retail sales are likely to contract as expected, given inflation rose 10% y/y versus 9.4% expected yesterday. Inflation and employment data is released for the Euro area at 10:00 and an ECB member speaks at 12:00.

But the main focus for traders is the Fed’s preferred inflation print – core PCE – at 13:30. Core PCE is expected to have risen 0.5% in September, up from 0.1% previously. Any signs of inflation coming in below expectations would be seen as a win, weigh on the dollar and likely support stocks. But if a short EUR/USD stands any chance then the ideal scenario is softer euro inflation coupled with stronger CPI for the US.

 

EUR/USD 4-hour chart:

EUR/USD is within a 3-wave retracement against its bearish trend. The rally has found resistance at the Sep 11th low, monthly S1 pivot point, 50% retracement level and 100-bar EMA and a small bearish hammer has formed. So perhaps there is the potential for a swing high develop. To switch to a bearish bias, we would like to see a series of reversal candles or a prominent bearish engulfing/outside candle to assume a swing high. A break above 0.9862 assumes bullish continuation.

 

 

FTSE 350 – Market Internals:

FTSE 350: 3779.32 (-1.77%) 29 September 2022

  • 32 (9.12%) stocks advanced and 316 (90.03%) declined
  • 1 stocks rose to a new 52-week high, 97 fell to new lows
  • 13.68% of stocks closed above their 200-day average
  • 78.92% of stocks closed above their 50-day average
  • 0% of stocks closed above their 20-day average

 

Outperformers:

  • +9.43% - HICL Infrastructure PLC (HICL.L)
  • +3.96% - PureTech Health PLC (PRTC.L)
  • +3.05% - Diversified Energy Company PLC (DEC.L)

 

Underperformers:

  • -34.75% - Synthomer PLC (SYNTS.L)
  • -14.74% - Mitchells & Butlers PLC (MAB.L)
  • -12.76% - Barratt Developments P L C (BDEV.L)

 

 

Economic events up next (Times in BST)

 

 

How to trade with City Index

You can easily trade with City Index by using these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    • Open an account in the UK
    • Open an account in Australia
    • Open an account in Singapore

  2. Search for the company you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

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. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024