Most European stocks edged higher on Tuesday despite a mixed tone registered overnight by Asian benchmarks as investors still struggle to assess the potential impact of US civil unrest to markets. While recent reassuring macro data and optimism about the reopening of economies in both Europe and the US have sustained the bullish pressure so far, investors are becoming increasingly worried about the situation in the US. Even if traders still don’t expect the current US civil unrest to last for long, these social and political events could seriously impact reopening and social distancing measures, raising fears of a second virus wave which would be disastrous to businesses and the economy as a whole. In addition to the virus threat, many think the current situation and the way President Trump is handling the issue could put his chances of a re-election in November at risk, making the short to mid-term outlook more uncertain.
All the EU benchmarks are trading higher with the DAX-30 Index registering the best performance so far on the old continent. The price continues to rally following a pull-back move above 11,830pts earlier this morning. The bullish trend remains valid and the next targets are above 12,000pts and 12,145pts. However, the bearish divergence registered between prices and the MACD indicator may indicate a trend slow-down on a very short-term basis.
