European stocks rose slightly on Thursday, although Asian stocks closed mixed as traders digested recent macroeconomic developments.
Uncertainty and confusion are mounting after investors reviewed US inflation data, which came in better than expected, along with mixed tone in the rhetoric of Federal Reserve officials.
It is becoming increasingly difficult to predict the path of monetary policy going forward as all options from raising interest rates to breaking the bullish cycle seem to be on the Fed’s table.
As a result, we are seeing a lack of optimism in stocks as traders look for safety as uncertainty mounts.
Technically, the STOXX-50 is still at a yearly high despite the recent uptrend being invalidated. The moving averages remain bullish, acting as dynamic price resistance.
However, the persistent bearish divergence with the RSI supports the argument for a slowing trend and a market correction. Support levels can be found above 4330.0 points in the short term, 4285.0 points and 4225.0 points / 4210.0 points by extension.
Pierre Ferret
Technical Analyst at ActivTrades
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