European Stocks Jump As Mood Music Improves

Fiona Cincotta
By :  ,  Market Analyst
After a stronger finish in Europe on Monday, European stocks have jumped higher on the open again today. The mood in the market is showing signs of improving despite mixed headlines. With equities markets now moving higher for 4 of the past 5 sessions investors are debating whether there are grounds for a sustained move higher.

Chinese factory data overnight gave a flicker of hope that the world’s second largest economy is firing back up, despite large parts of the world grinding to a halt. Comments by the WHO that the coronavirus outbreak in Europe may be approaching its peak is also boosting sentiment and comes as Italy sees the smallest number of new cases in two weeks. 

However, it is still far too soon to be singing victory. At the same time that the outbreak in Europe is showing signs of stabilising, restrictions on public life are also being ramped up meaning that there is still a lot of economic pain to get through. The coronavirus outbreak in the US is also escalating at a frightening rate. Deaths there have already reached 3000.

Uncertainty remains
The biggest cap on sentiment is owing to the amount of uncertainty still out there. We don’t know how long the lock downs will continue for and whether there will be a second wave of infections when restrictive measures are eased. Furthermore, we have no idea what state the global economy will be in when we come out the other side. These fears are likely to limit gains 

Dax levels to watch
The Dax has jumped 1.5% on the open, trading around the key psychological level of 10000, the top end of its trading range. On the 4 hour chart the Dax trades above its 50 and 100 sma. A close above 10150 could see more bulls buy in.
Immediate support can be seen at 9779 (today’s low) prior to 9460 (100 sma) and 9350 (50 sma and low 29th March)
Immediate resistance can be seen at 10150 (high 25th March) prior to 10750 (high 11th March) and 11150 (200 sma).

Chart analysis demonstrating how European Stocks Jump As Mood Music Improves. Published in March 2020 by FOREX.com

 
Related tags: Germany 40 Coronavirus

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