IBEX 35 Forecast: Rising COVID Infections Exacerbates Bearish Technical Picture

IBEX 35 Forecast, COVID, Economic Outlook – Talking Points

  • IBEX 35 cost movement breaks down amid new marketplace volatility
  • Spain’s rising COVID infection rates might drag index offer
  • Index faces bad technical setup in a near-term

The IBEX 35 Index pennyless down progressing this week along with a reflection European indices amid a hitch of tellurian risk-aversion, as a rate of Covid infections increases opposite most of Western Europe. Selling vigour has eased in new days for a IBEX, though stream cost movement appears to lend a technical advantage for bears in a short-term. Currently a index sits scarcely 7 percent reduce for September.

IBEX 35 Index (15-Min Price Chart)

IBEX 35 cost draft

Chart combined with TradingView

Compared to Its informal peers, Spain continues to humour from an outsized rate of infections. The 14-day accumulative box count per 100k is during 320.0, good above France, Germany, and a U.K., according to a ECDC. Madrid, Spain’s collateral city, recently reenacted prejudiced lockdown measures and called for troops support to accelerate containment efforts.

Traits of Successful Traders
Traits of Successful Traders

That said, relations underperformance in a Spanish index might continue given a outsized gait of infections. The IBEX’s opening year-to-date stands during -27% contra France’s CAC 40 during -17%, and Germany’s DAX during -1%. Adding to a deteriorating pathogen numbers, Markit Economics’ Flash Eurozone Services PMI Activity Index fell to a 4-month low for September.

IBEX 35, DAX, EU 50 Indexes (Daily Price Chart)

IBEX, EU 50 Index, DAX 30 Index

Chart combined with TradingView

Turning to a technical setup, this week’s slip brought cost subsequent a new multi-month low of 6788.9 set on Aug 3. The turn coincides closely with a 23.6% Fibonacci level. This before indicate of support will expected act as insurgency on a subsequent upswing.

IBEX 35 Index (Daily Price Chart)

IBEX cost draft

Chart combined with TradingView

Moreover, given Aug cost movement pinged a downward trending 50-day relocating normal several times while environment reduce lows. This relocating normal will expected offer as a subsequent pivotal technical turn to overcome should bulls conduct to better a formerly mentioned Fibonacci level. For now, prices might connect in a operation shaped from late Mar by mid-May. A mangle subsequent this operation would see a index behind nearby a 2003 lows.

–Written by Thomas Westwater, Contributor for DailyFX.com

Contact and follow Thomas on Twitter @FxWestwater