How long will the Bulls last?
After Asian markets, now European stock also moved higher today on Tuesday, boosted mainly by solid employment data from France and UK; however, concerns over a slower global economic recovery remain to put more stress on markets.
On the other hand, while US VIX is falling to 27, 10-years bond yields increase again above 2.9%. Russia's soft and somewhat unexpected reaction to Sweden and Finland's request to join NATO reduces risk in markets.
On the economic data front, the French unemployment rate fell to its lowest rate in 14 years in the first quarter, dropping to 7.3%, and UK unemployment at its lowest rate since 1974 at 3.7% together helped the market sentiment. European equities have weakened over the last month despite all these positive sentiments. It can even continue because COVID lockdowns in China and the war on Ukraine will bring more pressure from their most significant business partner and energy supplier. Mentioned reasons can increase inflation, encourage the ECB to make tough decisions, and increase stress on European stock markets.
While EU foreign ministers failed in their attempts on Monday to get Hungary to lift its veto of the bloc's proposed oil embargo on Russia, many believe that the biggest victim of this decision will be the European economy, and Hungary is doing a great favor to the Europeans by vetoing this decision.
Euro increased more than 1.1% against the US dollar, the German DAX gained 1.6%, France CAC-40 raised 1.4%, and FTSE100 in London traded 0.8% higher than its opening price.
DAX-30 Technical overview
From the technical point of view, DAX-30 is turning into positive sentiment. However, in the longer term, the bull will need to pass the 14,800. For now, 20 DMA at 13,900 is the pivot point, and as long as it's trading above this level, higher numbers would be in the spotlight. Turning under this level turns on alarms in favor of bears.
