EU Market Review 31st May 2021

by Elina Nikolova

DAX today traded as high as 15,524 in early trading on Monday morning. The price is attempting to test the 15,600 price all-time from last week. The Relative Strength Index (RSI) is trending above the mid-level of 50 indicating a bullish sentiment but the bullish impact is diminished because the RSI line is pointing downwards indicating possible weakness. The price action is also above the valid uptrend line formed from the October 30th 2020 bottom, which proves to be a strong support.
For the bears, a penetration and closing below the uptrend line may reverse the bullish trend. Important support found at 15,250 which coincides with the 0.618 Fibonacci retracement level and also the valid uptrend line. Support also found at 14,804 previous low from May 13th and at 14,430 low of March 25th 2021.
For the bulls, A break and close above last week’s high of 15,600 may signal a further rally. Important resistance at 15,526 previous top on April 19th, at 15,972 1.618 Fibonacci Extension price and finally at 2.618 Fibonacci extension at price 16694.
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• Bank holiday today in the UK, hence stats will come mainly from EU economic area. News include EUR M3 money Supply, EUR Private Loans stats and the Italian Preliminary CPI. German Preliminary CPI is also in focus.

• Asian stocks advanced, with the regional benchmark index heading for its best week in three months, as favorable U.S. economic data bolstered investors’ appetite for cyclical shares.
The MSCI Asia Pacific Index climbed as much as 1.2%, extending its gains for the week to more than 2%. The bluechip Nikkei 225 Stock Average rallied more than 2% to a near three-week high.

European shares rose to a record high on Friday as UK-exposed financial stocks gained following a hawkish comment from a Bank of England official, with the prospects of increased U.S. fiscal spending boosting market sentiment.
The pan-European STOXX 600 index rose 0.5% to a record high of 448.55 points.

• The British public's expectations for inflation in the year ahead cooled slightly this month, a survey showed on Friday.
Household expectations for price changes in the next 12 month eased to 2.7% from 2.8% in April, the survey from U.S bank Citi and pollsters YouGov showed.

• Germanys import prices grew 10.3 percent year-on-year in April, following a 6.9 percent rise in March, data released by Destatis showed on Friday. This was the fastest growth since December 2010. On a monthly basis, import price inflation slowed to 1.4 percent from 1.8 percent in the prior month. The rate was forecast to slow to 1.1 percent.

• Eurozone economic confidence index rose to 114.5 in May from 110.5 in the previous month, survey results from the European Commission showed on Friday. This was the highest score since January 2018, when the reading was 114.7.

• At 08:00 (GMT) EU M3 Money Supply y/y report is due. This measures the change in the total quantity of domestic currency in circulation and deposited in banks.

• At 08:00 (GMT) EU Private Loans y/y is due. This monitors the change in the total value of new loans issued to consumers and businesses in the private sector.

• At 09:00 (GMT) EU Italiam Preliminary CPI m/m is due. This monitors the change in the price of goods and services purchased by consumers.

• All day event – EU German Preliminary CPI is due to be announced. Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.

European indices Friday:

• DAX: +0.74%
• EURO: +0.78%
• MIB: +0.45%
• CAC: +0.75%

Sources: Investing.com, forexfactory.com, nasdaq.com, news.yahoo.com.