The Eurostoxx 50 index has declined 3.13% on the day after a record drop in the Eurozone area’s industrial production for March 2020. The 11.3% monthly fall and 12.9% year-on-year drop means that the coronavirus pandemic and consequent lockdowns and business closures have had a damaging effect on the economy of the Eurozone, and investors on the Eurostoxx 50 are reacting to the data.
Capital goods, autos and consumer durables were the worst hit indices, falling 15.9%, 40% and 26.3%. However, the demand for necessities such as food and drugs allowed the food products and pharmaceutical sector to stave off the negative impacts of the pandemic. Pharmaceuticals did well, posting an increase of 15%. However, this was not enough to prevent the decline, which rivals levels last seen in November 2009 at the time the effects of the 2008 global financial crisis was raging.
As countries start to open their economies, industrial production is expected to continue remaining soft as consumers focus on essentials and shun luxury items and durable goods purchases.
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If gold prices were to trade above the October 25 high of $1518.41, then the price might be able to reach the $1563.14 level, as the difference between the upper and lower limit of the pattern is added to the October 25 high. On a break to the October 11 low at $1473.68, the price might be able to reach the $1428.95, as the difference in the range is subtracted from the October 11 low.
Time will tell if bullish or bearish traders will command price as the chart pattern itself is neutral in its outlook.
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