IFC Markets Forex Broker

Technical Analysis EU50 : 2019-01-04

Deteriorating euro-zone data bearish for EU50

Euro-zone business activity slowed in December. Will the EU50 decline continue?

Euro-zone economic data have been negative recently: expansion of activity in private sector slowed in December. Markit’s composite purchasing managers index for euro-zone slipped to 51.3 in preliminary reading from 52.7 when an uptick to 52.8 was expected. Expansion slowed in both manufacturing and services sectors according to the preliminary readings. Negative business activity surveys were followed by a report consumer confidence deteriorated further in December. And Market reported couple of days ago manufacturing sectors slowed both in Germany and France. Growth in Germany’s manufacturing sector slowed again in December due to decline in new orders at the fastest rate in four years, whereas France’s manufacturing sector contracted. Negative euro-zone data are bearish for EU50.

EU50 continues declining  01/04/2019 Technical Analysis IFC Markets chart

On the daily timeframe EU50: D1 continues declining after hitting 11-month high in mid-May 2018.

We believe the bearish momentum will continue after the price breaches below the lower Donchian boundary at 2902.59. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the upper Donchian channel at 3105.35. After placing the pending order the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop-loss level (3105.35) without reaching the order (2902.59) we recommend cancelling the order: the market sustains internal changes which were not taken into account.

Technical Analysis Summary

PositionSell
Sell Stop Below 2902.59
Stop loss Above 3105.35

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Note: This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.


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