David Fuller's view Europe has been at the centre of concerns over global GDP growth in recent years but some respite in the lengthy recession is emerging. France and Germany appear to be leading a recovery in industrial production which rose 0.7 percent in June from May for the 17-nation Eurozone, according to Eurostat, the statistical agency for the European Union.

This has been reflected by a rally for the Euro STOXX 50 Index (weekly & daily), and to a lesser extent the Euro STOXX Bank Index (weekly & daily) since late June. Both of these Indices are now somewhat overbought on a short-term basis but a clear downward dynamic, similar to what you can see most easily at earlier highs on the daily charts shown, is required to check current momentum.

Ireland and Belgium are currently clear leaders to the upside among Euro denominated Indices, closely followed by The Netherlands and France. For once, Germany's total return Index is not leading although it remains in a clear upward trend as it retests the May highs. Among Northern European markets outside the Eurozone, Denmark, Norway and Sweden have broken to new recovery highs. Switzerland is lagging but bounced strongly from the region of its 200-day moving average and is within reach of the May high. Short-term overbought conditions are evident for all these Indices so this latest rally will spill over into a consolidation before long. Nevertheless, sustained breaks of the MAs would be required to question the medium-term bullish outlook.