This Monday, December 2, the bears seemed to have taken control of the market, the pan-European index Euro Stoxx 50 lost 1.77%, moving away from the zone of annual highs. In this article, we discuss our arguments for a change in the bias to bearish.

1. The fundamental traders are watching with suspicion at the progress of the negotiations between the United States and China. Besides, the new tariffs imposed by the Trump administration on steel and aluminum imported from Brazil and Argentina are added to the equation. On the other hand, the US government promised to apply tariffs on French products in response to France’s tax for digital services that would injure US technologic companies.

2. Technically, the pan-European index should make a corrective upward movement, which, depending on the depth, could give us clues as to the extent of the next move. We expect the bullish movement to reach the area between 3,650 points and 3,674 points. A close below 3,650 points would trigger a bearish position that could lead the price to drop to at least 3,609 points.

3. If the Euro Stoxx 50 index extends its falls, it could reach 3,571 points and even 3,531 points.

4. The bearish scenario will be invalid if the price climbs and closes above 3,691 points.

5. The risk posed by this downside scenario could occur if the drop recorded this Monday is a false move to trap sellers and lead to the Euro Stoxx 50 index reaching new record highs.

 

Trading Plan Summary

  • Entry Level: 3,650 pts.

  • Protective Stop: 3,691 pts.

  • 1st Profit Target: 3,609 pts.

  • 2nd Profit Target: 3,571 pts.

  • 3rd Profit Target: 3,531 pts.

Eurostoxx

 


 

Try Secure Leveraged Trading with EagleFX!

Risk Warning: CFD and Spot Forex trading both come with a high degree of risk. You must be prepared to sustain a total loss of any funds deposited with us, as well as any additional losses, charges, or other costs we incur in recovering any payment from you. Given the possibility of losing more than your entire investment, speculation in certain investments should only be conducted with risk capital funds that if lost will not significantly affect your personal or institution’s financial well-being. Before deciding to trade the products offered by us, you should carefully consider your objectives, financial situation, needs and level of experience. You should also be aware of all the risks associated with trading on margin.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD extends losses toward 1.1250 amid coronavirus concerns

EUR/USD is trading closer to 1.1250 as concerns about US coronavirus cases are growing. Eurozone finance ministers are meeting ahead of next week's summit.  US PPI and updated COVID-19 statistics are awaited.

EUR/USD News

GBP/USD pressured under 1.26 amid risk-off mood, Brexit uncertainty

GBP/USD is trading below 1.26, off the highs. Rising US coronavirus cases are pushing markets lower and the safe-haven dollar higher. Concerns about Brexit and the UK refusal to participate in the EU coronavirus vaccine scheme are weighing on sterling. 

GBP/USD News

Gold refreshes session tops, moves back above $1800 mark

The prevalent risk-off mood assisted gold to reverse an early dip to the $1796 region. A modest pickup in the USD demand might cap any further gains for the commodity. Investors also worried about the possibility of further escalation of Sino-US tensions.

Gold News

Canada Net Change in Employment June Preview: June is looking better and better

Job gains expected to more than double in June. Unemployment rate to drop to 12% from 13.7 in May. Ivey PMI was twice its forecast in June, highest since Nov 2019. USD/CAD would benefit from better June job figures.

Read more

WTI drops to fresh weekly lows below $39 amid virus risks, IEA forecast

WTI (August futures on Nymex) extends the steep declines seen on Thursday to drops over 1.50% in the European session this Friday. The oil bears breach the 39 level to hit the lowest levels in eight days at 38.76.

Oil News

Forex Majors

Cryptocurrencies

Signatures