European stock markets registered a light retreat on Wednesday following a mixed trading session in Asia, while U.S contracts also point to a weaker open as the consolidation continues on riskier assets. These bearish corrections, of limited magnitude so far, are mostly perceived as “healthy” by investors following the strongest rally of the year in equity markets.
However, some market operators also fear the renewed momentum of coronavirus may impact the pace of the recovery as it is likely to delay investments from businesses and consumers’ demand in some specific sectors, turning the current consolidation into a more sustained decline. Most Eurozone benchmarks are trading lower today with financial and energy shares at the bottom of the table while traders patiently wait for this afternoon’s US crude oil inventories alongside the EIA’s report.
The worst European performance comes from the Spanish IBEX-35 Index after the market opened well below 7,400pts. The price has continued its bearish correction, inside their mid-term bullish channel, following the failure below 7,625pts. Bollinger Bands are narrowing, a sign of a decreasing volatility, while the price is testing its first available support at 7,350pts. A break-out of this zone could extend the current correction towards the lower band, near 7,110pts.
Pierre Veyret– Technical analyst, ActivTrades
Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.
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