EuroStoxx50 possible contraction
The week has started with the British index closed for the Bank Holiday at the beginning of May. Europe faces Spanish unemployment rates and PMI data from several countries including the Eurozone. These are expected to be slightly positive and the market has started off higher all morning on all European indices with slightly more positive forecasts than in their previous release.
Looking at the chart it is possible to see that the EuroStoxx50 has made a price correction from a high of 5,130.41 to 4,815.36 points on Friday, April 19. After which, for two weeks a double top has formed and this week we could see what could be a Shoulder-Head-Shoulder figure. If this happens it is possible that the price will correct to the downside. At the moment, the RSI is in its mid-range pulling to overbought at 57.40%. The shape of the volume bell has formed a double bell on the 4-hour chart, with a checkpoint price (POC) of 4,926.20 points, so we have to see if the support of 4,891 points holds to see if the fall to 4,780 points is executed, which would be the support zone that follows the current one, or if it remains sideways and tries again to rebound in price.
We have to see how the European economy evolves during this quarter to see the ECB's steps in relation to interest rates on inflation in the Eurozone as this greatly affects the borrowing capacity of European companies. Although Lagarde's proposal is to keep them as they are until the economic situation in the Eurozone improves, unlike the rate cuts applied by the US FED.
Ion Jauregui - AT Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Looking at the chart it is possible to see that the EuroStoxx50 has made a price correction from a high of 5,130.41 to 4,815.36 points on Friday, April 19. After which, for two weeks a double top has formed and this week we could see what could be a Shoulder-Head-Shoulder figure. If this happens it is possible that the price will correct to the downside. At the moment, the RSI is in its mid-range pulling to overbought at 57.40%. The shape of the volume bell has formed a double bell on the 4-hour chart, with a checkpoint price (POC) of 4,926.20 points, so we have to see if the support of 4,891 points holds to see if the fall to 4,780 points is executed, which would be the support zone that follows the current one, or if it remains sideways and tries again to rebound in price.
We have to see how the European economy evolves during this quarter to see the ECB's steps in relation to interest rates on inflation in the Eurozone as this greatly affects the borrowing capacity of European companies. Although Lagarde's proposal is to keep them as they are until the economic situation in the Eurozone improves, unlike the rate cuts applied by the US FED.
Ion Jauregui - AT Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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