Short EurostoxxSome folks on the TA side are looking at a HnS in Eurostoxx.
Hard to disagree with this tbh.
Decent R/R shorting here as stop can be quite tight vs potentially large profits.
Momentum waning as well.
EUSTX50 trade ideas
European Shares Rise on Improving PMI ReadingsYesterday, the values of the PMI index (it is characterized as a leading indicator of industrial production and services) for European countries were published:
→ in Germany: fact = 42.3; expected = 41.1; a month earlier = 40.7;
→ in France: fact = 42.6; expected = 43.2; a month earlier = 42.6;
Although the index values are below 50, indicating a contraction in the economy, the dynamics are encouraging. Thus, in France, the index stabilized after a series of declines. And in Germany, the index is consistently growing after a minimum of 38.8 in July. In this way, business is reacting to the fact that the ECB may have reached the peak of increases and monetary policy will not tighten in the future.
At the same time, the ESX50 index of 50 European shares gained bullish momentum and reached its highest levels since mid-August. Equity market participants may be feeling strongly positive about the rally of more than +9% in less than a month.
However, the daily chart of the ESX50 shows that price dynamics allow a structure of trend lines (shown in blue) to be drawn, reminiscent of a Gann fan. And what's interesting is that the current value has reached an important line (shown as thickening) in this structure, which can serve as resistance - as it did more than once during the period from April to July.
Given that the RSI indicator is forming divergence in the overbought zone, it can be assumed that the market is vulnerable to a pullback.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
European benchmarks opened without clear direction on Thursday European benchmarks opened without clear direction on Thursday after mixed macro data failed to bolster market sentiment ahead of a long weekend in the US.
Lower transaction volumes and decreased market volatility traditionally occur during the long Thanksgiving weekend, when US investors stay away from their trading desks.
In addition, the recent batch of mixed macro data with poor PMI figures from France and better-than-anticipated ones from Germany didn’t help lift or drop market sentiment in the region.
The pan European STOXX-50 index opened mixed, with gains in healthcare, basic materials and energy offset by losses in consumer non-cyclicals and tech shares.
The market is trading with muted volumes, close to its major short-term resistance around 4,350.0/4,355.0pts as the bullish momentum keeps cooling.
Despite another slew of incoming European macro data today, with the Eurozone PMI alongside speeches from ECB and Bundesbank officials, we don’t expect the market to register any sharp or directional price action for the end of the week.
Pierre Veyret – Technical analyst, ActivTrades
Stock markets traded slightly higherStock markets traded slightly higher but remained in their consolidation zone on Wednesday, as risk appetite seems to take a break ahead of the last batch of economic data before Thanksgiving.
European benchmarks are trading sideways, with the STOXX-50 index still inside its 20-points wide trading range, after yesterday's release of the FOMC minutes, alongside the speech from ECB President Lagarde, failed to bring more direction to equities.
The minutes from the last FOMC meeting indicated that the Fed would remain cautious with its next moves regarding rates. This may temper the dovish expectations of investors, even though it only has a limited impact so far.
Investors are now likely to keep their eyes on the December meetings from both the ECB and the Fed, hoping for a significant switch of semantics from central bankers.
Meanwhile, the focus should be on macro data, especially with today's Eurozone consumer confidence, the US initial jobless claims, University of Michigan consumer sentiment, and durable goods orders.
The Stoxx-50 index trades above its moving averages, close to its 4,350.0pts resistance following a slight rebound supported by consumer non-cyclical and real estate shares, while the RSI indicator continues displaying a cooling bullish momentum.
Pierre Veyret – Technical analyst, ActivTrades
Equities continued to consolidate on Tuesday in EuropeEquities continued to consolidate on Tuesday in Europe, following a mixed trading session in Asia, as risk appetite lost momentum.
Most benchmarks traded sideways from Frankfurt to Madrid this morning, with gains in the industrial and basic material sectors offset by losses in financial and energy shares.
Not only have markets become less directional since the beginning of the week, but volatility has also decreased, highlighting the current slowdown in risk appetite.
The big question in investors’ minds is: are equity markets set for a correction following a three-week rally, or is the current consolidation just a breath before reaching new highs?
Technically speaking, the scenario of a coming correction prevails, as the price action currently diverges with the RSI indicator, which also already shows a break-out of the bullish dynamic trendline.
However, the macro front tells another story. With today’s release of the minutes of the last FOMC meeting and a speech from ECB President Christine Lagarde, investors may also prefer to sit back and wait for further developments on the monetary front before adjusting their exposure to equity markets.
The dovish narrative has now been largely priced in, and some investors are starting to think that one cooler-than-expected inflation print cannot be sufficient to reverse market sentiment completely: it will need to be confirmed by central bank officials.
The STOXX-50 index keeps trading sideways between 4,350.0pts and 4,330.0pts, with 4,385.0pts as the next major resistance, while 4,300.0pts can be seen as a key support for the market.
Pierre Veyret – Technical analyst, ActivTrades
European Markets Open Mixed on MondayShares markets opened mixed in Europe on Monday, holding gains ahead of further macro developments this week.
Market sentiment fluctuated this morning, as losses in Germany due to the sharp price action in Bayer, were offset by gains in Paris and Madrid.
Even if equities started the week without direction, risk appetite remains high from investors as the dovish narrative started two weeks ago remains in place.
Traders and investors are now focused on the release of the FOMC and ECB minutes of their last meetings, while speeches from many central bank officials, including ECB President Christine Lagarde and BoE Governor Andrew Bailey, also loom this week.
Elsewhere, geopolitical tensions remain an uncertainty driver for equity traders, especially after a vessel was seized by Houthi rebels in the Red Sea.
This raised concerns of an energy supply disruption, which drove the sharp price action in the energy sector this morning.
On the technical front, the STOXX-50 index still trades above the 4,330.0pts level despite an ongoing bearish divergence between prices and the RSI indicator, highlighting a rally slowdown. The break-out of the newly established support level could open the doors to a correction towards 4,300.0pts and even deeper.
Pierre Veyret – Technical analyst, ActivTrades
European shares rose on FridayEuropean shares rose on Friday, despite Asian benchmarks closing in the red, as investors brace for Eurozone’s CPI figures.
The sell-off in Asian Equities due to the US-Sino trade war resurgence didn’t spread to European contracts on Friday, as investors continued to cheer on the prospect of a much more dovish monetary policy to come.
Indeed, cooling inflation, bad economic data and lower oil markets all tend to fuel hopes of a significant switch in central bank monetary policy.
Speaking of inflation, most traders now have their eyes towards the next reading coming from the Eurozone to see if what they saw last week in the US will also be confirmed on the old continent.
Analysts also expect a significant drop here, with a 2.9% projection compared to 4.3% last month. Again, if these figures regarding the deceleration of price pressure were to be confirmed, or are even surprisingly better, then we should expect the current rally to continue further as risk appetite will likely grow more.
This scenario is currently getting priced in as the STOXX-50 index briefly traded above its short-term resistance at 4,330.0pts, with the 4,350.0pts zone now in sight.
Elsewhere, investors will also pay attention to today’s US housing starts data alongside speeches from Fed officials, while the spectre of a deadline regarding a deal about the government’s funding is slowly coming back into the spotlights.
Pierre Veyret – Technical analyst, ActivTrades
European markets fluctuated on ThursdayEuropean markets fluctuated on Thursday as bullish sentiment took a break while holding recent gains.
The equity rally spurred by dovish bets following cooler-than-expected inflation reports has now widely spread. Following sharp price rises on most benchmarks and a weaker US dollar, many traders have taken out profit, leading to some consolidation or slight pull-backs on those markets.
In addition, investors and analysts have also started wondering what the Fed’s reaction would be to the recent CPI data at its December meeting, as inflation falling faster than expected may push its members to reconsider the “higher-for-longer” narrative.
That said, most stock benchmarks remain well-oriented as pull-backs remain limited. The STOXX-50 index climbed higher since the opening bell, as solid gains from utilities, industrial and real estate shares offset losses in the energy and consumer cyclicals sector.
The market still trades above the 4,300.0pts zone, on its way to challenging the 4,330.0pts resistance for the second time.
Pierre Veyret – Technical analyst, ActivTrades
Stocks rallied in Europe on WednesdayStocks rallied in Europe on Wednesday, with a fresh boost to risk appetite as dovish bets resurge.
Market sentiment towards risky assets strengthened significantly after investors witnessed softer-than-expected inflation readings in the US yesterday and in the UK this morning.
These reports relieved stock investors, who now have more clarity on the likely path of monetary tightening from the Fed and the BoE.
With the prospect of a peak in the rate hike cycle and even growing bets of rate cuts in the first half of 2024, stock traders have been given the green light to increase their exposure to equity markets.
Cooling inflation is the signal many have been waiting for, and while we must wait for the December meetings to confirm the future of monetary policies, the news should provide strong support for stock prices.
However, EU investors aren’t out of the wood yet as the EU CPI report still looms on Friday.
This bullish shift can be seen technically, as the STOXX-50 index cleared two major daily resistance levels in a few hours and is now trading well above the 4,300.0pts level. The next big resistance is around 4,385.0pts, while intermediary zones are located close to 4,330.0pts and 4,350.0pts.
Pierre Veyret – Technical analyst, ActivTrades
Stock benchmarks registered modest gains on TuesdayStock benchmarks registered modest gains on Tuesday, extending the sentiment seen in Asia overnight, with investors bracing for today’s crucial US inflation data.
As previously said in our last report, market sentiment towards risky assets has lost a bit of its direction over the past few days after Federal Reserve officials expressed mixed hints about the future of monetary policies. With traders and investors worldwide not knowing what to believe, they will likely turn their focus back to data, making today’s inflation print crucial.
Simply put, if the cooling of rising price pressure is confirmed with today’s data, the prospect of a less aggressive stance from the Fed could become a reality, likely boosting appetite for stocks.
On the other hand, CPI data showing inflation remains stubbornly high would negatively impact price action towards equities, opening the way for a deep correction on most benchmarks following the rally that started at the end of October.
The first scenario is currently being priced in as the STOXX-50 index challenges a major daily resistance at 4,240.0pts, driven higher by basic materials, healthcare and consumer cyclicals.
Pierre Veyret – Technical analyst
Morgan Stanley Analysts Raise Forecasts for S&P 500According to them:
→ the price of the S&P 500 index will reach 4,500 at the end of the year (previous forecast = 4,200);
→ the dollar will continue to remain strong.
According to Goldman Sachs analysts, published yesterday, the price of the S&P 500 index will fluctuate around current levels, forming a consolidation zone.
That is, a decline in the S&P 500 is not a priority scenario. An important test that will provide more important information about current market sentiment will occur today: US inflation data will be published at 16:30 GMT+3. According to forecasts, it will slow down from 3.7% to 3.3%.
In anticipation of news, E-mini S&P 500 index futures are showing reduced volatility. If inflation data gives rise to bullish momentum, it is possible that the price of the S&P 500 will move up, pushing off from the median line of the ascending channel (shown in blue). Then, justifying the forecasts of MS analysts, the price may reach the upper limit of the channel this month.
Also worth paying attention to:
→ increasing local minima A, B, C show signs of demand strength;
→ RSI indicates non-divergence, increasing the likelihood of a movement to the lower border of the channel.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Equities climbed slightlyEquities climbed slightly at the start of a new week in Europe despite a bullish trend losing direction ahead of this week’s CPI data.
Investors and analysts are bracing for crucial inflation prints from the US, EU and the UK this week, with the desperate need to clarify where monetary policies will likely go in these regions, especially after the mixed signals sent by Fed officials over the past ten days.
Lower-than-expected inflation rates would highlight the fact monetary tightening from the Fed, the ECB and the BoE has worked efficiently and that a dovish switch could be around the corner, supporting investors’ appetite for risk and driving stock markets to new highs.
Higher than anticipated inflation numbers would have the opposite effect, suggesting rates are not yet at a level restrictive enough and that more hikes may be coming, dramatically affecting the price action towards equities.
A number inside the previous vs anticipated data window could preserve the status quo and the current slow bullish stance on most markets, making investors wait for the next central bank meetings before driving stocks higher in a much sharper fashion.
The STOXX-50 trades around the 4,225.0pts mark, currently higher in all sectors, with healthcare and financial shares as the top movers. Despite a bullish trend slowdown registered by the bearish divergence with the RSI indicator, the market remains well-oriented, still trading its mid-term bullish channel.
Pierre Veyret – Technical analyst, ActivTrades
European benchmarks opened lower following the bearish trend European benchmarks opened lower following the bearish trend sparked at the end of the US trading session yesterday but quickly bounced back as bull traders defended support levels.
Fed Chairman Jerome Powell’s warning that borrowing rates may not be at “restrictive enough” levels surprised investors yesterday, stalling the rally in equities and treasuries while sending the US dollar higher.
This sudden hawkish tone contrasts with the dovish hints provided during the last FOMC meeting, leaving investors with a blurry feeling about the outlook on monetary policies.
However, since the European opening bell, bull traders seem powerful enough to prevent the market from dipping much deeper, successfully defending the 4,195.0pts/4,200.0pts zone on the STOXX-50.
Investors are likely to now wait for clear direction and action from central banks rather than relying on rumours and semantics. That said, equity markets may consolidate in a lower volatility environment as investors will wait for next week’s data (US/EU/UK CPI) before bringing significant adjustments to their risk exposure.
Pierre Veyret – Technical analyst, ActivTrades
EU50 low risk for shortshi Traders,
EU50 broke the upsloping support and retested it as resistance which confirms our bearish bias.
It's still in pretty low risk area for short entry.
Difficult to be bullish on EU50 , especially now when we've seen a weekly bearish engulfing candle last week.
Risk - Reward ratio: 4.11
Entry , stop loss and target are shown on the chart
Good luck
Bullish eurostoxx 50 at 15 min chartBullish eurostoxx 50, at 15min char, on my bet, for 30 euros, or 30 pips
Eurostoxx 50 at Important Support.Eurostoxx 50 at Important Support. Production in Europe is Declining
As data released this morning showed:
→ Purchasing Managers' Index (PMI) in France: actual = 42.6, expected = 44.4, a month ago = 43.6. Thus, the index dropped to its lowest level since the panic associated with the spread of coronavirus.
→ PMI in Germany: actual = 40.7, expected = 40.1, a month ago = 39.8.
Since the values of the PMI index (considered a leading indicator of the state of the economy, calculated by S&P Global) are significantly below 50, this indicates a contraction of the economy in the 2 most important countries of Europe in the context of high interest rates.
It is not surprising that the European stock index Eurostoxx 50 shows bearish dynamics: the price is below the SMA (100), which is directed downwards. The publication of PMI values added negativity. Will the bearish trend continue?
The Eurostoxx 50 chart gives hope, because the Eurostoxx 50 has dropped to key support, which is located at the psychological level of 4,000. In the past, this level has had a noticeable impact on market dynamics: the price either bounced or made a breakout with a subsequent test. This psychological level property can be used to find an entry point into a position while reducing risk.
It is possible that the level of 4,000 may become a factor for the emergence of a bullish impulse, which will lead to a noticeable rebound; the proximity to the lower line of the ascending channel (shown in blue) can also add courage to the bulls.
But for the rebound to develop into a sustainable upward trend, it can be assumed that positive evidence about the state of the European economy will be required.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Eu50eur bullish 15min chartEurostoxx 50 eu50eur bullish for some bucks at 15 min chart, target 60
Its my bet on this one, but we can have a need of close the position if it turns arround
Bullish at eu50eurBullish at eu50eur 1hr chart, just take the best spot to put a long position or buy, with the smaller timeframes
EUR50EUR Long Pivot: 4280.00
Our preference:
long positions above 4280.00 with targets at 4341.00 & 4358.00 in extension.
Alternative scenario:
below 4280.00 look for further downside with 4257.00 & 4237.00 as targets.
Comment:
the RSI is bullish and calls for further advance
EURO50 ShortPivot: 4275.00
Our preference:
short positions below 4275.00 with targets at 4247.00 & 4220.00 in extension.
Alternative scenario:
above 4275.00 look for further upside with 4290.00 & 4315.00 as targets.
Comment:
the upward potential is likely to be limited by the resistance at 4275.00.
Breakout RetracedWe've seen an outbreak from the mid July range. Today's upward retracement has built a new bear flag. Dtarting from this retracement level we could see new lower prices now.
EURO50 Long Pivot: 4294.00
Our preference:
long positions above 4294.00 with targets at 4349.00 & 4372.00 in extension.
Alternative scenario:
below 4294.00 look for further downside with 4275.00 & 4240.00 as targets.
Comment:
the RSI lacks downward momentum.
