EU Market Review 19th May 2021

DAX reached new highs at price 15538 in early trading on Tuesday morning, however, the price on Wednesday morning opened with a gap, finding support on the 0.618 Fibonacci retracement level near Monday’s close. The Relative Strength Index (RSI) is trending above the mid-level of 50 indicating a bullish sentiment. RSI however is registering lower tops as the price registers a new high, with the line pointing downwards, which is a sign of weakness. The price action is also above the valid uptrend line formed from the October 30th 2020 bottom.
A penetration and closing below the trendline may reverse the bullish trend. Important support found at 15250 which coincides with the 0.618 Fibonacci retracement level and also the valid uptrend line. Support also found at 14804 previous low from May 13th and at 14430 low of March 25th 2021.
A break and close above today’s high of 15538 may signal a further rally. Important resistance at 15526 previous top on April 19th, at 15972 1.618 Fibonacci Extension price and finally at 2.618 Fibonacci extension at price 16694.

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• There will be some bustling in the Eurozone economic calendar, with stats coming from the UK and the EU. Among others, UK’s Consumer Price Index (CPI) and Core CPI will give hints to inflationary tendencies, followed by the same exact news relating to the European Union.

• European stocks rose temporarily on Tuesday before ending flat, with Germany's equity index hitting a record high on optimism around several countries easing economic restrictions, falling unemployment rate in the United Kingdom and strong earnings reports from companies.

• Asian shares rose on Tuesday, shrugging off worries about an increase in regional coronavirus infections, while inflation jitters helped push gold prices to three-month highs. Japan’s Nikkei rose as much as 2.3% on solid earnings reports and bargain hunting, while Hong Kong’s stocks were up 1.3%.

• Economic data yesterday included 2nd estimate GDP numbers and March trade data for the Eurozone. In the 1st quarter, the Eurozone economy contracted by 0.6%, quarter-on-quarter. Year-on-year, the economy contracted by 1.8%. Both were in line with 1st estimates. In March, the Eurozone’s trade surplus narrowed from €17.7bn to €15.8bn.

• 06:00 (GMT) UK Consumer Price Index (CPI) is due. The forecast is an increase of 1.5%. Consumer prices account for a majority of overall inflation.

• 06:00 (GMT) UK Purchasing Power Index (PPI) is also due. This measures the change in the price of goods and raw materials purchased by manufacturers.

• 08:00 (GMT) The ECB Financial Stability Review will be publicised. This is an assessment of conditions in the financial system and potential risks to financial stability that can provide insight to future monetary policy decisions.

• 09:00 (GMT) EU Final Core Consumer Price Index (CPI) results will come out. This indicator measures the change in the price of goods and services purchased by consumers, excluding food, energy, alcohol, and tobacco.

• 09:00 (GMT) EU Final Consumer Price Index (CPI) is due to be announced. This measures the overall change in the price of goods and services purchased by consumers and is an indicator of inflation.

European indices yesterday:

• DAX: -0.07%
• EURO: -0.04%
• MIB: +0.07%
• CAC: -0.22%

Sources: Investing.com, forexfactory.com. fxempire.com