Shares opened lower throughout Europe as uncertainty rises ahead of what may prove to be an eventful day. Even if simmering Sino-US tensions are nothing new to investors, the relationship between the two blocs has now become the biggest source of uncertainty to markets. President Trump is set to hold a press conference later where he is expected to lay out the US response to China’s stance in Hong Kong. This has sparked fresh concern for investors, who fear a further escalation in tension between the two nations will put the phase one trade deal, as well as any future political or economic relationship, at risk. Investors will be hoping for clues as to the next move by the Federal Reserve when Jerome Powell as the FED’s chairman, is expected to participate in a virtual discussion today. Having said that, it is not surprising investors wanted to secure part of this week’s rally by taking some profit, ahead of today’s important news.
The DAX-30 index has registered the worst performance in Europe so far even if the market remains above 11,600 pts. Technically, today’s bearish move doesn’t really threaten the underlying bullish trend and may be a simple correction, the next target remains at 12,145 pts. However, a break-out of the 11,530-pts short-term support level today could lead the market to a deeper corrective move towards 11,230 pts and 10,965 pts.
