European economic activities continue to perform well

European stock markets closed flat on Monday as investors awaited significant economic data such as earnings from US technology giants and European banking groups such as UBS (SIX:UBSG), Deutsche Bank (ETR:DBKGn), Santander (BME:SAN), and Barclays (LON:BARC). After the collapse of the US regional financial institutions last month, including the takeover of Credit Suisse (NYSE:CS) by rival UBS, the European bank lost nearly $180 billion, which, while there has been some recovery, is still $70 billion less than it was before the crash in early March.

The most recent economic data show that, despite the Eurozone economy's continued strong recovery, inflation is still high despite tightening monetary policy. Additionally, even though consumer confidence in the eurozone is still low, good economic statistics in the service sector could lead to an uptick in wage pressure.

The eurozone trade balance achieved a surplus of 4.6 billion euros in February, up from a deficit of 9.4 billion euros the previous year, owing mostly to a substantial increase in chemical and machinery exports, as well as recoveries in Germany and Italy.

German producer prices rose 7.5%, less than the 9.8% expected in March. It was the smallest year-on-year increase since June 2021, while energy prices remain the main cause of rising inflation.

Meanwhile, many French food retailers and suppliers are expected to be dealt with by the French government for not lowering their selling prices and seizing the opportunity to pass on the cost to consumers trying to cope with rising living costs. Global wholesale food costs began to decline by 20.5% in March for the 12th consecutive month, following calls for an average 10% increase in food prices, which pushed food prices in France up to a record 15.8% year on year in March. After accounting for decreasing energy prices, it also led to a limited decline in France's overall inflation rate of 6.6%.

Early in May, the European Central Bank is anticipated to increase interest rates once more. The majority of analysts predict a 25 basis point increase, potentially even more given the chance that the ECB may keep interest rates on hold longer than the Federal Reserve. The first-quarter GDP figures for the Eurozone, which are due out on Friday, April 28, are likely to show a modest increase in the region's economy and are expected to have an impact on European markets this week. This is supplemented by inflation figures from Germany and Spain, which might show that price indexes are still rising. Because of this, the overall European stock market tends to be stable and might even decline partially during this time.

Data for Technical Analysis (5H)

Resistance : 4350, 4352, 4355

Support : 4344, 4342, 4339                  

5H Outlook

Source: Investing.com                    

Buy/Long 1 If the support at the price range 4339 – 4344 is touched, but the support at 4344 cannot be broken, the TP may be set around 4350 and the SL around 4336, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 4350 – 4355, TP may be set around 4358 and SL around 4341, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 4350 – 4355 is touched, but the resistance at 4350 cannot be broken, the TP may be set around 4342 and the SL around 4358, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 4339 – 4344, TP may be set around 4334 and SL around 4353, or up to the risk appetite.       

Pivot Points Apr 25, 2023 02:32AM GMT

Sources: Investing 1, Investing 2