European futures traded little changed around 0, after a positive Asian session in which most markets rose, following sentiment from Wall Street, ignoring weak Chinese export data. Technology companies continue to be the main driver behind growth in global markets, with the likelihood of a pause in Fed hikes (meeting next week) supporting the interest-sensitive sector. Sentiment in global markets remains cautious with some doubting whether prices have risen too quickly due to the hype around artificial intelligence.
Also, positivism remains limited, with fears of worsening economic conditions around the world largely dampening sentiment towards risk assets. Even if the Fed ends its rate-hiking cycle next week, markets will still have to contend with interest rates staying higher for longer and a potential recession in large parts of the world.
Towards the middle of the week, the picture in Europe is improving, although different in structure from other markets, with every single sector reporting growth.
The release of German industrial production data showed weaker-than-expected data with limited growth from the previous month, with the data having a negative impact on the Dax, which is right on the edge of the psychological 16K.
A calm economic calendar of releases today in Europe, with the focus of investors today on the ECB members speech at 12pm. in the afternoon, the trade balance data in the US is expected at 3:30 p.m.
The German Dax was able to recover and close above the 16K levels, but the growth was limited to the border of the previous high spike, as the lack of more charge in the momentum, the slight decline in volumes, may give some basis for price pressure from the bearish participants today. Although narrowed, the range scenario looks the most likely at the moment, with no major change in technique and the main weekly support and resistance levels holding.
Weekly Support Zone – 15,900 – as a break below them would accelerate the sell pressure
Weekly Resistance Zone – 16 00 – 16 100 /key level/ – a break and close above 16 100 will seriously support bullish participants, for a possible test of the High levels of 16 350.
There is a slight improvement in the direction of On Balance Volume, but the DeMarker remains Flat in neutral territory, and the indicators do not give signals of a change in the sideways trade.
I do not expect a significant change in the weekly trading range during today’s session.
Dealer Alexander Alexandrov