Stock markets drifted lower on Friday in Europe, extending yesterday’s losses as many investors switched their exposure from risky assets to safe havens on the fresh advance of the coronavirus. In addition to lingering concerns of the spread of coronavirus outside of China, recent disappointing economic data from Asian countries like Japan, Australia and Korea also weighed on investor sentiment. This risk-off mood takes place following fresh warnings from huge international groups like Alibaba and Apple on the business disruption caused by the deadly virus. However, markets in Europe are not entirely being driven down by these factors. Miners and energy companies are Europe’s worst performers today as traders digest a possible ceasefire in Libya and this is stabilizing the oil price as the week draws to an end.
Today traders will pay close attention to the EU’s inflation report, which is already sparking bullish price action on the single currency. The Stoxx-50 Index is currently challenging its support level at 3,800pts after it broke out from its rising wedge pattern which is usually an indication of an upcoming trend reversal. The 89-period moving average has already reversed itself while the MACD indicators seems to plead for a bearish continuation. The next targets are 3,770pts and 3,740pts if the support at 3,800pts breaks today.
