European indices try to recover as US shut for Independence Day
Outlook on FTSE 100, DAX 40 and Euro Stoxx 50 as German Trade Balance shows first deficit since reunification.
FTSE 100 tries to recover on the back of stronger Asian markets
The FTSE 100 is seen holding above last week’s low at 7,100 on the back of generally stronger Asian markets on bargain hunting and amid closed US markets for Independence Day. The two-month resistance line at 7,288 represents a possible upside target.
Key resistance above it comes in at the 7,331 to 7,362 mid- to late June highs as well as along the 200-day simple moving average (SMA) at 7,365. This area would need to be exceeded, for a medium-term bottom to be formed.
Slips may find support between the 21 June high at 7,193 below which further support can be found at the 7,157 May low and also at the 14 June low at 7,134.
DAX bounces off last week’s low despite first trade deficit since 1991
The DAX 40 continues its recovery rally from last week’s low at 12,617, made not far above its March low at 12,432, despite a much weaker than expected German Trade Balance reading which came in at -€1 billion in May versus an expected €1.2b and €3.5b in April.
It appears to be the first trade deficit since German reunification in 1991.
Immediate resistance is seen along the two-month downtrend line at 13,002 with the May low at 13,275 representing the next upside target. Having said that, the index will remain in a bearish trend while it stays below its last relative high, i.e. when a daily candlestick high is made at a higher high than that on the candle to its left and to its right.
In this case it is the 27 June high at 13,383 and since it is close by, the 21 June high at 13,444 as well. Only if these highs were to be exceeded, would a bullish reversal be confirmed.
Minor support is seen at the 23 June low at 12,839 and more significant support at last week’s low at 12,617 below which lies the March low key support at 12,432.
Euro Stoxx 50 stages recovery rally
The Euro Stoxx 50 has taken its lead from Asian markets overnight and is trying to recover further from Friday’s 3,406 low, made marginally above its mid-June low at 3,401, whilst targeting the one-month resistance line at 3,512 and the 21 June high at 3,524.
On the way up lies the May low at 3,493. If, however, a fall and daily chart close below the recent lows at 3,406 to 3,401 were to ensue, the March trough at 3,388 would probably also be slid through with the October 2020 high at 3,311 being targeted.
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