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FTSE MIB


Samir 1
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Hi Samir, thanks for coming here.

As you may expect, the Italian economy is facing enormous challenges. The government has decided to open the doors of restaurants, cafes, museums and shops this week after nearly three months of lockdown. 

“One step at a time, with caution and attention, so as to avoid falling and going back. Italy will start running again,” wrote PM Conte in a column in a daily newspaper.

However, the very strict hygiene and social distancing measures are still in place, which makes it difficult for businesses to operate.

“Were I to open tomorrow, I wouldn’t have one client. There are 12 luxury hotels on the street. Sixty percent of my business comes from their clientele and they’re all closed,” an owner of a bar in Rome was quoted saying by the AFP.

Italy has also opened beaches and its museums in a bid to attract international tourists. It is estimated that around 10% of the Italian GDP is based on tourism. Their hopes will be boosted by the fact that international travel is set to resume next week. 

Looking at the charts, the FTSE MIB index printed in March the lowest levels seen since 2013. The price action has been attempting to recover since both April and May now likely to finish in the green. 

The buyers have pushed the price action to the 38.2% Fibonacci retracement, which is located above the 18000 mark. If this level is broken, the buyers will aim to force the price action towards the key intraweekly resistance at 18,500. In addition, the horizontal resistance also sits here, which makes this area very difficult to break.

All in all, the FTSE MIB is still struggling. Its German counterpart, for instance, has already managed to recover more than 60% of corona-related losses.


 

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