The EUROSTOXX 50 starts the week under pressure after a mighty sell-off following the release of the September jobs report from the US economy, which reinforced that the FED are likely to continue to hike rates aggressively.
Going forward this week the emphasis is going to be on the CPI inflation report from the United States economy. A strong number is likely to sink stock markets across the globe.
The EURO STOXX 50 is worth watching closely as it can get the overall market mood in Europe. Plus, it is heavily speculated on by investors across Europe.
Basically, the EURO50 a stock index of Eurozone stocks designed by STOXX, an index provider owned by Deutsche Börse Group. The index is composed of 50 stocks from 11 countries in the Eurozone.
The EURO STOXX 50 represents Eurozone blue-chip companies considered as leaders in their respective sectors. The EURO STOXX 50 Index is derived from the 19 EURO STOXX regional Super sector indices. As of April 2021, the most countries with most companies represented are France, representing 36.6% of all total assets and Germany at 33.2%.
High levels of bullish sentiment are still being seen towards the EURO50, with some 73 percent of traders currently holding a bullish view towards the European stock composite.
This large bullish sentiment bias probably hints that we are close to a major reversal to the downside and more losses are likely.
EURO50 Short-Term Technical Analysis
The EURO50 has formed head and shoulders pattern, and the head and shoulders pattern is only invalidated if the current August high is broken.
According to technical analysis we could be close to putting in a price top soon. And a final thrust lower could be on the cards towards 2,800.
EURO50 Medium-Term Technical Analysis
The EURO50 is likely to head lower as it tests towards the bottom of a large descending triangle pattern across the daily time frame. These patterns are typically considered bearish continuation patterns.
A break of the 3300 level could cause a 500-point shock to the downside, which would drive the index towards the 2800 area.