EUROPEAN SHARES
European stocks traded higher on Wednesday, paring yesterday’s losses ahead of Jerome Powell’s testimony.
Most benchmarks climbed in the Eurozone this morning, with confidence boosted by encouraging international trade data from Germany following the lack of risk appetite registered yesterday.
Investors are still bracing for this afternoon’s highly expected testimony from Fed Chairman Powell, whose statement could significantly impact the price action of a wide range of assets.
In addition, investors will also pay close attention to the US JOLTs figures for January and the crude oil inventory data due later in the afternoon.
While the macro environment remains uncertain, technical analysis provides us with a better picture of what investors may think of the market.
The STOXX-50 index broke out of its bullish trendline during yesterday’s trading session, meaning the mid-term bullish trend that started in January is no longer valid.
However, the sharp rebound on the lower bound of the current tight trading range around the 4,900.0pts level, combined with the lack of a bearish breakout on the RSI indicator, tells us the market isn’t likely to reverse to a bearish trend soon.
At this point, the most likely scenario is a short- to mid-term consolidation as a pause before reaching new highs in the longer run.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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