EUROSTOXX50 : The Index is Reversing Downward
Following the rise in the index from the lows of mid February at the level of 2700.0, the index EUROSTOXX50 managed to won back part of the losses sustained from the beginning of last December. At that time ECB had expanded its QE program; however market participants found this measure insufficient.
Since mid-March the price corrected and went up to 3110.0 (Fibonacci 50%).
However, the pair failed to rise further and after taking profit on the long positions, traders are increasing the number of short positions. Draghi’s statement that further decline in the interest rate is not required in Europe was taken by traders as an indication that monetary policy easing in Eurozone might be terminated.
Latest negative European macro-economic statistics put pressure on European indices.
The price of the index EUROSTOXX50 has broken down important support level of 3010.0 (Fibonacci 38.2%, ЕМА50 on the daily chart, ЕМА200 on 4-hour chart) and continues to decline approaching to 2890.0 (Fibonacci 23.6% to the wave of decline since December 2015).
Breakout of this level may trigger further decline in the pair to 2830.0, 2700.0 (lows of 2016) in the descending channel on the daily chart with the lower limit at the level of 2600.0.
Support levels: 2890.0, 2830.0, 2790.0, 2700.0 and 2650.0.
Resistance levels: 2960.0, 3010.0, 3110.0, 3135.0 and 3200.0.
Sell Stop: 2870.0. Stop-Loss: 2920.0. Take-Profit: 2830.0, 2800.0, 2700.0, 2650.0 and 2600.0.
Buy Stop: 2970.0. Stop-Loss: 2920.0. Take-Profit: 3010.0, 3110.0, 3135.0 and 3200.0.
The material has been provided by LiteForex - Finance Services Company - www.liteforex.com