From the end‑of‑session perspective, it is clear that the focus of the scene was the environment, which operated in the context of increased risk appetite. The persistently fragile, yet ongoing standoff between the USA and Iran led to a decline in oil prices. In fact, WTI and Brent crude contracts began to overvalue around 8:00 Polish time, only to lose about 3 percent by the close of European markets.
Alongside the commodity price drop, European indices found gains, helped by the weakening dollar. The GPW – with an emphasis on the WIG20 – received further support from the strengthening zloty and rising metal prices, which combined into a strong upward impulse and, in a sense, forced the demand side into the game.
WIG20 breaks a series of declines – could this be the start of a rebound?
The result is the best WIG20 session in terms of percentage change since mid‑April, the point at which the index began a nine‑day streak of falling candles. The first white body since April 21 not only broke the downtrend but also entered the last demand‑supply squeeze near the technical support level around 3,500 points.
At present it is difficult to speak of a consolidation end at the psychological level, but it is also hard not to note the increased market activity confirming price moves.
In practice, demand faces the opportunity to build a move that will become a counterweight to the last underpricing. The risk in this balance of forces remains the stance of the base markets and the fragility of the Middle East situation.
A return to a hot conflict phase would likely bring further oil price rises, meaning that the key variable behind European stock overpricing in late April would return to the markets.
