Market Analysis

Stock markets drifted lower on Friday

Stock markets drifted lower on Friday in Europe, extending yesterday’s losses as many investors switched their exposure from risky assets to safe havens on the fresh advance of the coronavirus. In addition to lingering concerns of the spread of coronavirus outside of China, recent disappointing economic data from Asian countries like Japan, Australia and Korea also weighed on investor sentiment. This risk-off mood takes place following fresh warnings from huge international groups like Alibaba and Apple on the business disruption caused by the deadly virus. However, markets in Europe are not entirely being driven down by these factors. Miners and energy companies are Europe’s worst performers today as traders digest a possible ceasefire in Libya and this is stabilizing the oil price as the week draws to an end. Today traders will pay close attention to the EU’s inflation report, which is already sparking bullish price action on the single currency. The Stoxx-50 Index is currently challenging its support level at 3,800pts after it broke out from its rising wedge pattern which is usually an indication of an upcoming trend reversal. The 89-period moving average has already reversed itself while the MACD indicators seems to plead for a bearish continuation. The next targets are 3,770pts and 3,740pts if the support at 3,800pts breaks today.

Pierre Veyret– Technical analyst, ActivTrades

Chart Source: ActivTrades platform ActivTrader

*The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication. All information has been prepared by ActivTrades PLC (“AT”). The information does not contain a record of AT’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of futures performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.