It looks like the Eurostoxx 50 is tracing out a contracting triangle as part of its correction. The structure is nearly finished and should resolve with a spike to the downside. Overall the structure most likely forms a corrective zig zag before the most European equity index continues its journey to the upside. We are bullish after this correction completes!
Comment:
Still viewing triangle as most likely. Expect spike to the downside until year end. Red line is support of a 17-year down trend channel.
Comment:
It was a triangle indeed! Correction needs to play out before going long SX5E.
Trade closed: target reached
All in all we think that another leg down is more probable in the SX5E.