European benchmarks edged slightly higher on Wednesday, paring some of yesterday’s losses, as investors have now digested the fact the vaccine could be delayed. However, bearish leverages remain on stocks with investors struggling to assess if the current correction is just a market pause for breath or if it is a harbinger of something larger and deeper. All eyes are now on tomorrow’s ECB meeting in Europe. While Christine Lagarde is expected to hold rates, many bull traders also think the ECB will bring further support measures in order to mitigate the current downside risk, which would provide another fresh boost to equity markets. On the other hand, no further stimulus from the ECB could seriously disappoint investors and impact market sentiment on the short to mid-term basis and lead to a deeper correction.
In the meantime, the situation on UK stocks is starting to get interesting for Bull traders as the ongoing Brexit talks keep putting pressure on the Sterling, which in turn is having a bullish effect on the FTSE-100 Index. The market is challenging resistance at 6,000pts and could quickly head to 6,035pts and 6,095pts if a clearing of this zone were to happen today.
