Markets drifted shortly after the opening bell in Europe on Friday, following a mixed sentiment in Asia, as investors digest the latest US inflation data.
Yesterday’s inflation report didn’t surprise investors after showing the expected decrease in price pressure (7.1% to 6.5%)
While this should be seen as positive economic news, the fact that a lot of it was already priced-in earlier this week is having a negative impact on today’s market sentiment as investors are now “selling the news” and taking profit following a 9-day bull run.
The likelihood of a pull-back or sideways trading has increased today after most benchmarks have now broken-out of the lower band of their bullish channel, invalidating the short-term bullish trend. The DAX-40 still trades above the 15,000.0pts level after the German index failed to clear the strong 15,115.0pts/15,135.0pts resistance mentioned in our previous analysis.