Stocks opened higher not only in Europe but almost everywhere around the globe as investors’ risk appetite continues to grow in the middle of the week. The rally sparked by traders who first bet on a quick recovery is now gaining momentum. More and more investors are joining the buy side, trying to catch the train while they still can, boosted by growing stability for businesses and national economies now dealing with a less uncertain environment. This crowd effect offers strong support to the current rally with most benchmarks now trading near their three-month highs following the V-shaped rebound between March and April. As well as renewed global optimism, the market may already be pricing tomorrow’s new €500b stimulus plan from the ECB as well as Friday’s US jobs report. Even if the technical landscape does not look threatening to prices, most markets are now trading near major resistance levels, which could lead to short-term corrections or lateral consolidations prior to the announcements later in the week.
The Stoxx-50 Index, still trading inside its bullish channel, is now entering the strong 65-points-wide resistance zone between 3,195pts and 3,260pts. A clearing of this zone would drive prices higher towards 3,360pts and 3,465pts by extension while a failure below would take the market back to its first support just above 3,105pts.
