European equity markets head North

Intermediate
  • A solid advance by the major European (and in fact global) equity markets over the past 24 hours, building on the renewal of risk appetite over the past week as global equity markets have entered earnings season.
  • Moreover, this more recent positive tone has built on the intermediate-term bullish trends from late 2018 through Q1 2019, assisted by solid consolidation phases seen in March and more recently in early April.
  • This activity leaves risks for still further gains as markets continue to overcome resistance levels from last year (with US averages eyeing all-time highs).
  • A more recent negative tone for GBPUSD has assisted in pushing the UK benchmark equity average, the FTSE 100, higher.
  • Whilst an improvement in German economic data over the past week has allowed for a robust advance by the German flagship index, the DAX.

FTSE 100 bull theme reinforced

After a week of cautious consolidation activity, a probe higher Tuesday to a new cycle and 2019 high above 7414.5 and to also probe through modest 7422 resistance, to reject the recent corrective setback and resume the intermediate-term bull trend, to keep the bias higher Wednesday.

The early February push above 6998.5 sets an intermediate-term bull trend.

For Today:

  • We see an upside bias for 7429.5; break here aims for a key peak at 7453, maybe towards 7477.
  • But below 7380 opens risk down to 7357.5, maybe towards 7325.5.

Intermediate-term Outlook – Upside Risks: We see an upside risk for 7453 and 7570.

  • What Changes This? Below 7068 shifts the outlook back to neutral; through 6943 is needed for a bear theme.

Daily Chart

FTSE 100

DAX bull trend extension

A solid rally Tuesday to yet another new cycle and 2019 peak Monday and again already this morning, above resistance as high as 12136, to 12145.5, reinforcing the surge Friday and prior move through the psychological/ option target at 12000, plus the earlier April rebound from just above our 11866.5/863 support area, to keep risks to the upside for Wednesday.

The early April push through a key resistance at 11640 shifted the intermediate-term outlook back to bullish.

For Today:

  • We see an upside bias for 12145.5; break here aims for 12192, even 12250.
  • But below 12045.5 targets 12006 and then maybe 11968.

Intermediate-term Outlook – Upside Risks: We see an upside risk for 12455 and 12873.

  • What Changes This? Below 11285 shifts the intermediate-term outlook straight to a bear theme.

 4 Hour Chart

DAX

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