Today's interesting charts
David Fuller's view Europe
has been at the centre of concerns over global GDP growth in recent years but
some respite in the lengthy recession is emerging. France and Germany appear
to be leading a recovery in industrial production which rose 0.7 percent in
June from May for the 17-nation Eurozone, according to Eurostat, the statistical
agency for the European Union.
This
has been reflected by a rally for the Euro STOXX 50 Index (weekly
& daily), and to a lesser extent
the Euro STOXX Bank Index (weekly &
daily) since late June. Both of these
Indices are now somewhat overbought on a short-term basis but a clear downward
dynamic, similar to what you can see most easily at earlier highs on the daily
charts shown, is required to check current momentum.
Ireland
and Belgium are currently clear leaders
to the upside among Euro denominated Indices, closely followed by The Netherlands
and France. For once, Germany's
total return Index is not leading although it remains in a clear upward
trend as it retests the May highs. Among Northern European markets outside the
Eurozone, Denmark, Norway
and Sweden have broken to new recovery
highs. Switzerland is lagging but bounced
strongly from the region of its 200-day moving average and is within reach of
the May high. Short-term overbought conditions are evident for all these Indices
so this latest rally will spill over into a consolidation before long. Nevertheless,
sustained breaks of the MAs would be required to question the medium-term bullish
outlook.