Potential signal:
- I still believe in this index, and would be comfortable buying right here, right now.
- I would have a stop loss at the €4820 level, with a target of €5100 above.
The EuroStoxx50 initially pulled back just a bit during the early hours on Tuesday but continues to see inflows in a continuation of the overall bullish pressure. The €4835 level is an area that had been support previously, and the fact that we have bounced from there should not be a huge surprise, due to the fact that the market has been in an uptrend, and of course we have a situation where the market had been in an uptrend to begin with.
European Central Bank
Top Forex Brokers
The European Central Bank will continue to be a major influence on stocks in the European Union, as it looks like the ECB is willing to step in and continue to provide support for financial assets. The ECB recently cut rates, and it looks as if they will continue to do so going forward, despite the fact that they said they may have to be “data dependent.”
Ultimately, I think this is a market that is at the bottom of the larger consolidation area that suggests that we are working off some of the excess froth from the shot higher earlier this year. In the short term, the €5000 level could be a bit of a barrier to overcome, especially as the 50-Day EMA sits right around the same area, and that being the case, the market is likely to see a little bit of noise in that general vicinity of we do in fact get there.
On the downside, the market breaking down below the €4800 level could open up a move down to the 200-Day EMA, which of course is an indicator that a lot of traders will pay attention to from a longer-term standpoint and use it as a bit of an indication as to what the trend is at the moment. Either way, I think this is a situation where we will look at that as a potential floor as well, but if we were to break down below there, things could get rather ugly and more likely than not, we would see other indices start to break apart as well.
Ready to trade our daily forex forecast? Here are the best CFD stocks brokers to choose from.