EU Market Review 20th May 2021

Volvo enjoyed impressive growth since March 2020, with the price moving within a channel reaching as high as 240.80 SEK. The price broke out below that channel on the recent dividend date on April 1st. The chart shows a lower top registered on May 18th at 223.20 SEK and now the price is testing the tentative uptrend line formed from that bottom at 212.00 SEK. The Stochastic Relative Strength Index (Stochastic RSI) is out of the oversold area below the 80 line and the signal line is crossed below the RSI line indicating that the bulls are running out of fuel. The price is also below the valid downtrend line formed from the all time high of 240.80 SEK, further strengthening the bears case.
A break and close below the tentative uptrend line at 212.00 SEK may signal a further selloff while a close above 223.20 SEK above the valid trendline from the all-time high might resume the uptrend.
Important support levels at 212.00 at the tentative uptrend line, at 205.65 SEK derived from May 3rd bottom and at 201.30 derived from the April 21st bottom .
Important resistance levels at 223.20 SEK previous top of May 18th, at 230.20 SEK derived from the march 29th top and 240.80 SEK derived from the all-time high on March 15th.

--------------------------------------------------------------------------------------------------------------------------------------

• It’s a relatively quiet day ahead on the economic calendar. Economic data from the EU and the UK will draw interest ahead of economic data from the U.S. Announcements include German PPI and EU Current Account, and from the UK PPI and the CBI Survey.

• European stocks posted their worst daily fall in one week on Wednesday, tracking weakness on Wall Street, as investors grew wary of rising inflationary pressures increasing the odds of an early tightening of monetary policy.
Euro Stoxx 50 futures were down 1.71%, German DAX futures also fell 1.77%, and FTSE futures were down 1.19%.

The major Asia-Pacific stock indexes settled higher on Tuesday, led by a jump in Taiwan shares. Japanese shares jumped as investors shrugged off disappointing GDP data. In the cash market, Japan’s Nikkei 225 Index settled at 28406.84, up 582.01 or +2.09%. Hong Kong’s Hang Seng Index finished at 28593.81, up 399.72 or +1.42%, In China, the benchmark Shanghai Index settled at 3529.01, up 11.40 or +0.32% and in Australia, the S&P/ASX 200 Index finished at 7066.00, up 42.40 or +0.60%.

• Eurozone inflation picked up in April, with the annual rate of inflation coming in at 1.6%, while the core annual rate of inflation softened. In April, the annual rate of inflation picked up from 1.3% to 1.6%, which was in line with prelim figures. A year earlier, the annual rate of inflation had been 0.3%.

• 06:00 (GMT) German Purchasing Power Index (PPI) is due. This indicator measures the change in the price of goods sold by manufacturers.

• 08:00 (GMT) EU Current Account is also due. This measures the change in the price of goods and raw materials purchased by manufacturers in the Eurozone.

• 10:00 (GMT) UK’s Confederation of British Industry (CBI). This is a survey of about 550 manufacturers which asks respondents to rate the relative level of order volume expected during the next 3 months.

• 12:00 (GMT) ECB’s President Lagarde is due to speak in a panel discussion about gender-related topics in money and finance at an online conference hosted by the European Money and Finance Forum.

European indices yesterday:

• DAX: -1.77%
• EURO: -1.71%
• MIB: -1.58%
• CAC: -1.43%

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