EuroStoxx 50: Sideways StrategiesMarket Context
Recent trading sessions have been marked by expectations regarding the US Federal Reserve 's monetary policies. The market anticipates that the US central bank will adopt a less aggressive stance in its interest rate cuts. This backdrop has boosted the dollar, which has gained nearly 4% from last month's lows, as reflected in the Dollar Index, which measures the currency's performance against a basket of international currencies.
This more consolidated environment has impacted both the Ibex 35 and the EuroStoxx 50, with both indices coming dangerously close to their technical supports. For the Ibex 35, key support lies between 11,560 and 11,600 points, the break of which would indicate a bullish exhaustion.
EuroStoxx Analysis
The EuroStoxx 50 (Ticker AT:EURO50), one of Europe's benchmark indices, is less than 1% away from its first key support, located around 4,900 points, coinciding with the delta buying pressure zones and the checkpoint zone (POC) of the price bell. The proximity to this technical level has generated concern among investors, as a possible breakout could trigger a more prolonged consolidation phase in the European market. Given that the shift of the sideways range will be pronounced for a longer period. Currently the movement between the highs of 5,310.41 and the support marked in February and reinforced in August in the area of 4,669 points. If we follow the current movement, everything seems to indicate that the crossing of the 50-average over the 200-average that began in the last week of September is losing strength. And if we accompany it with the Bollinger bands support the idea that the market seems to be highly lateralized.
Outlook for the EuroStoxx 50
In the case of the EuroStoxx 50, a drop below 4,840 points could lead to a broader price retracement confirmation, and would take the index to the September lows at 4,700 points, which coincides with the lower zone of the sideways range. However, this drop is not necessarily perceived as a negative signal, but as a possible buying opportunity in the European market. As long as the index does not break the September lows, the bias will remain bullish, offering opportunities for investors looking for re-entries in the European market.
Ion Jauregui - Activtrades 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.