European stocks approaching 16 year highs

Market Talk

• EU Stocks 50 Index has gained +30% during the previous six months as interest rates move towards “normal”
• Market expectations for European Central Bank (ECB) rates to “peak” around 4.25% could help to push up European stock market prices
• ECB could be positioning for three more rate hikes, starting next month May 2023 with +0.25%; June +0.25%, and July +0.25%
• A 4.25% ECB interest rate looks a lot more “normal” than the previous period of negative rates

EU Stocks 50 Index technical commentary:

The EU Stocks 50 Index (weekly chart) remains in a near term uptrend (26-49 days) Multi-month higher tops and lower bottoms on price indicate a Dow pattern uptrend, momentum analysis is bullish since both the 6 week and 13 week rate of change (ROC) indicators are above their respective zero lines; moving average study is bullish since current price is above its 13 week and 26 week moving averages. Upside prospects for a further advance towards the 4,520s can not be ruled out, while downside risk is seen below the 4,160 lower support (see chart).

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Today’s economic calendar

Earnings Season:

On deck today:

On deck tomorrow (Tuesday 18th, 2023):

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Today’s trading bullets

Silver price remains in an uptrend

• Silver: The price break above the key resistance at $24.60 adds to support the resumption of the March 2023 uptrend; any prospective “pull back” in price could be viewed as “corrective”; upside extension towards $26.72 remains on the table, while downside risk is seen below the $22.24 lower support.

German Dax testing key resistance:

• German Germany 40 Index: Current price testing key resistance near the 15,930s, provided price can “break” above the 15,930s the prospects for a further price advance towards 16,990 - 17,000 (round number) can not be ruled out. Downside risk spotted below the 15,313 support.