IBEX 35 rebound fades

Spain’s Prime Minister Pedro Sanchez would seek to continue the state of emergency, aimed at containing the COVID-19 pandemic, until 9 May - but added the total confinement of young people will be relaxed slightly from 27 April.

Spain suggests a recovery fund of around €1.5 trillion financed through perpetual EU debt to face the Covid-19 crisis. This proposition would not imply legal modifications. German chancellor Angela Merkel has already said that she will not accept any kind of “coronabonds”. The next European Union summit will be held on Thursday.
With nearly 200,000 cases, Spain is one of the countries hardest hit by the coronavirus pandemic.

From a technical perspective, the IBEX 35 index struck against its upper Bollinger boundary on a daily chart and is capped by the 38.2% Fibonacci retracement level of the former down leg. The price index is now challenging its 20-day simple moving average. A simple ABC correction chart pattern would drive prices down towards the horizontal support at 6420 and 6090.

Only a break above 7440 would invalidate the bearish view and would call for a recovery towards 8000.

Source: GAIN Capital, TradingView

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