Despite a mixed trading session in Asia, EU share markets ticked higher on Monday as investors digested reassuring virus updates from Italy, France and the UK. Investors who were already betting on the recovery were pleased to see these three European countries registering their lowest death rates since March, ahead of lockdown easing in these areas. This boost to sentiment saw markets trade higher all over Europe at the opening bell, even though investors are likely to stay cautious in the days and weeks to come, with the fear of a second wave ever present. In addition, a lot of the bullish drivers are already priced into markets with some traders wondering if there is still room for an extended rally this week. As a result, traders may be tempted to take any profits ahead of a busy week with significant data due from China and the US as well as the anticipated OPEC monthly market report due on Wednesday. Uncertainty and volatility are likely to be on the rise this week and this could lead to a reduced exposure on riskier assets from investors.
The FTSE-MIB from Milan is today’s best performer with the market having already broken through its double resistance at 17,530pts (50% Fibonacci + Speedline) and is now trading near 17,450pts. However, the Bollinger bands are widening, indicating rising volatility, and the price is already near its upper band suggesting a pull-back towards 17,380-17,315pts at the very least.
