Technical Analyst, Saxo Bank
AEX25 was hit with heavy selling Tuesday but the Index managed to close above support at 679. A close below is likely to fuel new sell-off down to June lows. Some support at 664.
RSI is showing negative sentiment and a close back below 40 will further confirm the bearish outlook. For AEX to reverse the downtrend a close above 704 is needed.
BEL20 was rejected a few cents below the 0.618 retracement at 3,745 and was hit by heavy selling. Now finding support at the 0.618 downward retracement at 3,598. RSI is showing negative sentiment and a close back below 40 will further confirm the bearish picture. A break below 3,594 is likely to ignite a new sell-off down to 3,500.
If BEL20 closes below 3,500 there is no strong support before around 3,235. Minor support at 3,332. BEL20 needs to close above 3,766 to reverse this bearish picture.
CAC40 bounced to the 0.618 retracement only to be rejected and hit by massive selling. Finding support at 0.5 retracement a break below 6,183 is likely to fuel a new sell-off that is likely to take CAC40 to support at around 6,031.
A close below 6.000 is very likely to push the Index to test June lows at around 5,786
RSI showing bearish sentiment and no divergence supports the bearish outlook. A close below 40 will further support the bearish picture. A close above 6,395 will demolish this bearish scenario
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.