EUROPEAN SHARES 
European benchmarks pared some of last Friday’s losses by trading higher this week, in a corrective move after prices hit major support levels.

Investors seem to be buying the dip on EU shares, temporarily at least, after a new annual market low had been registered on most indices last week.

Today’s price action is then likely to be a corrective move inside an underlying bearish trend, as uncertainties persist on the old continent.

Investors are still digesting the far-right wing victory in yesterday’s Italian elections while additional pressure is being brought by the monetary/political situation in the UK following the announcement of an economic reshape, with significant tax cuts and fewer regulations, by the PM Liz Truss.

Investors are also bracing for another busy week with speeches from ECB and Fed officials alongside a batch of significant macro news such as Chinese PMI, US GDP and EU CPI.

The GBP continues to crash alongside the main FTSE-100 UK index which highlights the lack of confidence investors have in the Government’s plans while assessing the prospect of tighter monetary conditions from the BoE.

The index now trades slightly above a 3-month low with no sign of any bullish rebound in sight.

Prices may quickly get back to their annual market bottom at 6,775pts if the 6,960pts/7,010pts zone gets broken.

Source: ActivTrader

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