EU Market Review 8th July 2021

by Charalambos Constantinides

Palladium Futures seem to be recovering from the fall that followed the all timer high that was registered on May 4th at price 3019.00 . The price bottomed at 2452.00 on June 18th and attempted to penetrate the 61.8% Fibonacci retracement level that coincides with the 50 Day Moving average (MA50) on July 6th . The price closed below this level and re-attempted to penetrate above it on July 7th which it did successfully. The price is now at 2835.00 area.
The MA50 is crossed above the MA100 but the MA50 is sloping downwards, indicating a potential weakness. The Relative Strength Index (RSI) is above the mid-50 level in bullish territory but still below the 70 oversold area and is sloping upwards in a bullish stance.
For the bulls, important resistance points exist at 2875.50 derived from the Jun 2nd top, also at 3019.00 derived from the top of the last downward move on May 3rd , and finally at 3370.00 which is the Fibonacci 161.8% extension level.

For the bears, important support points exist at 2805.00 where the MA50 sits exactly on the 61.8% Fibonacci retracement level, also at 2680.00 where the MA100 stands now, and finally at 2452.00 which is the bottom of the last downward move observed on June 18th.

It’s a relatively quiet day ahead on the economic data front. German trade data for May will be in focus later this morning. From the ECB, the monetary policy meeting minutes will probably attract plenty of attention.
• European stocks rose on Wednesday as commodity-linked stocks recovered from sharp falls in the previous session, while lower bond yields kept supporting highly valued technology shares.
The pan-European STOXX 600 rose 0.8%, a day after the index snapped a three-day winning streak as worries about the global economy led to a bond market rally that pushed U.S. and euro zone bond yields lower.

• German industrial output fell in May, data showed on Wednesday, another hint that semiconductor supply bottlenecks are slowing the recovery in Europe's largest economy.
The Federal Statistics Office said industrial output decreased by 0.3% on the month after an upwardly revised decline of 0.3% in April. A Reuters poll had pointed to a rise of 0.5%.

• Britain's housing market boom showed some signs of cooling in June as prices fell in monthly terms for the first time since January ahead of the scaling back of a tax break for buyers, mortgage lender Halifax said on Wednesday.
Prices were 0.5% lower than in May, Halifax said. In annual terms, they stood 8.8% higher than in June 2020 after leaping by the most in 14 years in May when they rose 9.6%.

• On a three-month moving average, French exports have been picking up since June 2020 at an increasingly moderate pace. In May 2021, they progressed slightly and remained at 94% of their average level in 2019, as in April. Imports have grown more strongly for six months, after having been broadly stable between September and November 2020. In May 2021, exports slowed down and reached 98% of their average level in 2019. The French trade deficit has increased significantly the past five months - although less so this month - and reached the level of 6.6 billion euros.

Important Daily Events:
• At 06:00 (GMT) German Trade Balance is due. This indicator measures Difference in value between imported and exported goods during the reported month.

• At 11:30 (GMT) ECB Monetary Policy Meeting Accounts are expected. It's a detailed record of the ECB Governing Board's most recent meeting, providing in-depth insights into the economic conditions that influenced their decision on where to set interest rates.
European indices Yesterday :

• DAX: +1.17%
• EUROSTOXX 50: +0.64%
• FTSEMIB: +0.23%
• CAC40: +0.31%