Monday, September 25, 2023

European stock markets are looking to central banks for reason to move higher

Stock markets started September on the same foot as they closed in August. The indexes of the Old Continent sign decreased by about 1% and added to the fall of the previous month. The EuroStoxx 50 has lost more than 5% since the start of August and reduced its annual growth to less than 12%. And technically this latest fall has led it to reach again the minimum zone already tested on August 18, which is the day when the European stock markets in general test the strength- on the supports they found at 4,170 / 4,200 points.

“This support is the basis of the consolidation that started at the end of last April, where it first reached the resistance of 4,415 points which, I remind you, is the highest of the year 2021 and 2022,” explained Cabrero, who added that this area “continues to be a dividing line that separates a continuation of the current consolidative context of the last four months from a corrective one, where the door opens to a likely fall to the March low, as of 3,980 points” .

In this context, it is too early to reject the hypothesis that we will see another fear, leading the main benchmark indices – in Europe and the US – to find their respective support zones. And even more considering that we are on the eve of knowing the decisions of the most important central banks on the planet whether to keep high interest rates or not.

“If they are patient, they will get a reward or an opportunity to buy again in the North American stock market, where I consider that there is a higher potential in the coming weeks or, at least, where I have more clear. goals to look for,” he explained in his weekly strategic commentary Joan Cabrero, technical analyst and strategist at Ecotrader.

“My recommendation,” emphasizes the expert, “is not to panic as long as you don’t lose support like 4,300 points in the S&P 500 or 4,000 points in the EuroStoxx 50.

And more, considering that doubts about whether the most important central banks on the planet (including the Fed and the ECB) will keep interest rates high, which continues to put pressure on a market with views set on. this Thursday’s ECB meeting and the US inflation data on Wednesday.

Ibex 35 supports

In the case of the Ibex 35, the support zone to monitor is at the minimums it marked in July and August at 9,170 / 9,200 points, which is the dividing line that separates a consolidative context from a potential bearish depending on whether they are maintained.standing or lost respectively.

Technical analysis of ibex 35

“Below these levels there is no brake until the support represented in March below 8,500 points, reaching it is the opportunity I am waiting for to recommend buying again the Spanish stock market with a medium -term vision,” explained Cabrero.

Nation World News Desk
Nation World News Desk
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