European Open: Parity (1.0000) acts like a magnet on EUR/USD ahead of EU and US data

Asian Indices:

• Australia's ASX 200 index rose by 52.6 points (0.75%) and currently trades at 7,050.70
• Japan's Nikkei 225 index has risen by 184.19 points (0.65%) and currently trades at 28,497.66
• Hong Kong's Hang Seng index has risen by 255.7 points (1.33%) and currently trades at 19,524.44
• China's A50 Index has risen by 50.57 points (0.38%) and currently trades at 13,472.82

UK and Europe:

• UK's FTSE 100 futures are currently up 24.5 points (0.33%), the cash market is currently estimated to open at 7,496.01
• Euro STOXX 50 futures are currently up 11 points (0.3%), the cash market is currently estimated to open at 3,678.46
• Germany's DAX futures are currently up 49 points (0.37%), the cash market is currently estimated to open at 13,269.06

US Futures:

• DJI futures are currently up 111 points (0.34%)
• S&P 500 futures are currently up 63.25 points (0.49%)
• Nasdaq 100 futures are currently up 20.25 points (0.49%)

Asian equity markets were higher overnight on news that Beijing will provide further stimulus for the economy and help support the yuan. The Hang Seng Enterprise Index and Hang Seng were the top performers, rising ~2% and 1.5% respective. Outside of China, the majority of Asian indices were higher, by around 0.3% to 0.8%.

Germany kicks off today’s economic calendar at 06:00 with GDP data, followed by the IFO business climate report at 08:00 – which stated the Germany economy is on the brink of a recession in July. The ‘expectations’ index plummeted to its lowest level since April 2020, and likely has the potential to fall further given the rise in energy costs. However, there comes a point where we have to question just how bad things can get – and whether it is priced in.

US 2^nd estimate for GDP is released at 12:30, which also includes figures such as corporate profits, sales, consumer spending inflation date (core PCE). But as the data is lagging (and therefore backwards looking), its unlikely to prompt a large market reaction without large revisions. GDP is estimated to have shrunk by -0.9% in Q2. Whilst not as bad as Q1’s -1.5%, it does mean the US is within a technical recession, despond by two consecutive quarters of negative growth.

EUR/USD 4-hour chart

EUR/USD remains within a bearish channel on the 4-hour chart, and within a retracement phase since printing a higher low above 0.9898 support. Prices are once again drawn to the parity level, which also coincides with the upper bearish trendline – which makes it appealing to bearish swing trades. But we know that data form Europe is due soon – and with data being so dire then an upside surprise may prompt a more bullish response than weaker data would for bears. Either way, bulls and bears have a clear resistance zone to plan their directional trades around for today’s session.

FTSE 350 – Market Internals:

FTSE 350: 4137.5 (-0.22%) 24 August 2022

• 170 (48.57%) stocks advanced and 166 (47.43%) declined
• 4 stocks rose to a new 52-week high, 35 fell to new lows
• 30% of stocks closed above their 200-day average
• 99.43% of stocks closed above their 50-day average
• 3.43% of stocks closed above their 20-day average

Outperformers:

• + 26.87% - AVEVA Group PLC (AVV.L)
• + 6.62% - Baltic Classifieds Group PLC (BCG.L)
• + 5.80% - 4imprint Group PLC (FOUR.L)

Underperformers:

• -6.70% - Aston Martin Lagonda Global Holdings PLC (AML.L)
• -4.54% - Provident Financial PLC (PFG.L)
• -4.33% - Hays PLC (HAYS.L)

Economic events up next (Times in BST)

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