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Euro Stoxx 50 has continued its sharp move lower, breaking below the potential uptrend from 2016 at 3031 as well as key support at 2909/2896, analysts at Credit Suisse note.

Key quotes

“We expect volatility to remain high and stay biased towards further weakness for now, with next major support seen at 2678/2673, the December 2016 lows. 

“If the 2016 lows would break, this would suggest a much more damaging long term ‘double top’ has been completed, with the next and just initial supports then seen at 2569/2495, the 61.8% Fibonacci retracement of the whole 2009/2020 upmove.”

“In contrast, a reversal to see a weekly close back above 3031 would be very encouraging and would remove our bias towards further weakness. However, a move above 3212/60 is needed to confirm the worst of the selling is behind us.”

 

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