MoneyFlow & EU PreMarket: Flat Opening in Europe. Defense Mode – Traders Await ECB /15:15 CET/ and US PPI /15:30 CET/.

Futures in Europe and the US recover yesterday’s decline. Stock markets in Europe will start trading an inch above yesterday’s closing levels after a mixed Asian session, with most markets in Asia retreating, reflecting greatly reduced risk appetite among traders. Cool sentiment in today’s session as well, with traders awaiting the ECB rate decision /15:15pm/ and Lagarde’s follow-up comments /15:45pm/.
-Strong US consumer inflation data erased dovish expectations towards the Fed, which weighed heavily on sentiment.
-Bonds suffered their biggest price decline since Feb 2023 while the yield on 10yr US debt confidently held above 4.5%.
-Dollar remains stable after posting its largest gain in the current year. US PPI data is due today /15:30pm/, which if it surprises the markets, like yesterday’s CPI growth in the dollar will continue in today’s session.

Despite the serious growth of the Dollar and bond yields, the enviable resilience of the US stock market is impressive.
The

-SP500 has successfully held above the $5,150 level, which currently indicates that despite the strong decline in dovish expectations, long-term sentiment on Wall Street has not changed materially.
-We are about to enter the Q1 earning season, which, if it maintains the positive trend of the previous quarters, will provide the necessary support to the SP500 long trend.

-Even if the correction deepens to the $5,000 level, this would be seen as a healthy correction and trend-sanitizing impairment, and would be used by traders to add to Long positions.

Asia Session:
Weak Chinese inflation data also rattled regional markets. Chinese markets are lower after data showed inflation contracted more than expected in March. A steady decline in PPI inflation also shows weak signs of economic recovery in China, which has been struggling with a persistent deflationary trend over the past year.
-China’s weakness is also negatively impacting other markets in Asia, given that they rely on the country as a major trading partner.
-Hong Kong’s Hang Seng Index is defying the trendline by making another breakout attempt, trading in a narrow range just below a key resistance.

European PreMarket:
-Futures in Europe keep trading in a tight range. In premarket trade, early advances from the Asian session are easing as traders prepare for a flat opening around yesterday’s closing levels. Sentiment is cautious as traders await the ECB rate decision and subsequent guidance.
-Indicators are showing a cooling in the market, after nearly two months in overbought territory.
-Corrective momentum has potential to develop, with trading in Europe’s major indices well above their averages and 23.6FIBO on the underlying Long.
-Long term sentiment is still bullish but Short term sentiment is very chilled.

TECHNICAL PICTURE – DAX FUTURES – DAILY CHART
-Short term expectation – DAX is preparing for a more serious test of the psychological 18,000 at the bottom of the main Long trend channel, as a break and close below 18K will trek deeper corrective momentum towards the 17,700 /23,6FIBO/ and 17,500 /65MA/ levels.

Alternatively:

Holding above 18K levels will keep trade in the tight range between 18,300 and 18,000 levels

FOREX MARKETS – DAILY HEATMAP