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European Stocks headed South once again

Market Analysis

UK100, H4 and Daily

European stock markets headed south once again with concerns about the progress of U.S. tax reform plans continuing to weigh on global investor sentiment. European markets are heading for another weak day investors are cautious while digesting this week’s wealth of earning reports, with no appetite to push things further, especially with the EUR rising against the USD. The Euro Stoxx 50 is 0.17% lower, while the UK100 is off 0.47% and the Ger30 roughly flat.

Elsewhere, the UK100 underperforming despite UK Strong production numbers. After UK100’s selling off seen yesterday, today strong negative momentum seems to be still in place. The index open today below the Daily Trendline, while it broke earlier the recent swing low (on November 2) and the strong support area at 50-Day MA and 38.2 Fibonacci level, at 7440.0.

The Daily indicators suggest that down-pressure has not been faded yet, since MACD is still at the positive twittery, turning however lower making lower highs, while Stochastic is at 38 sloping downwards as well. Oppositely, in shorter timeframes such as hourly and 4-hour price action, both indicators are oversold, suggesting that is likely to see a correction within the day, after the sharp tumbling seen up to now.

Hence two contrasted position were taken today with entry at 7448.8.  The first one is a Daily Short position with Target 1 above 200-DAy MA and at 50.0 Fibonacci level, at 7390.0, and Target 2 at 7350.0. Support is at 7520.0 and 7550.0

The 2nd position is an intra day position, with at Target 7470.0 and Support at 7420.0.

 

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Andria Pichidi

Market Analyst

HotForex

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