EU Market Review 12th May 2021

by Elina Nikolova

NIKKEI is currently trading just above the important support at 28120. The Japanese Index is failing for a second consecutive day to register gains, as investors remain concerned about the implications of faster inflation and the continuous surge in commodities. The price yesterday penetrated and closed below the 100 day Moving Average and today it continues its fall hovering around 28150 price level. The RSI is in negative territory but not yet below the 20 level to signal an oversold condition. The MACD signal is crossed below the MACD line and both are trending below the zero line in negative territory confirming the bearish sentiment.
A penetration and closing of the price below the important 28120 support may signal a further selloff. Other important support levels found at 27540 level and at 26930 level. Important resistance levels which if penetrated may signal a reversal of the bear trend include the 29700 recent high of May 10th, which coincides with a downtrend line formed from consecutive lower tops. Other important resistances found at the 30280 level and the all-time high of February at 30720.

• The news for EU Economic Area and Europe today are coming from Germany and the UK. From Germany we will have the ZEW Economic Sentiment and at the same time the ZEW Economic Sentiment of the EU in general. Later on there will be a speech by Bank of England Governor Ben Bailey.

• European stock markets are expected lower Wednesday, continuing the recent global selloff as surging commodity prices and growing inflationary pressure in the United States stoke concerns of early rate hikes.

• According to Wednesday early released data, UK's GDP grew by 2.1% in March from February, gathering speed for a possible sharp bounce-back this year after its deep coronavirus slump of 2020.

• At 09:00 (GMT) the announcement of the EU Economic Forecast is due. This report includes economic forecasts for EU member states over the next 2 years, and covers about 180 variables.

• At 09:00 (GMT) Bank of England (BOE) Governor Ben Bailey is due to speak at an online event hosted by the International Swaps and Derivatives Association. As head of the central bank, he has more influence over the nation's currency value than any other person.

European indices yesterday:

• DAX: -1.82%
• EURO: -1.92%
• MIB: -1.64%
• CAC: -1.86%

Sources: Investing.com, forexfactory.com