Wednesday, June 17, 2020 1:00 AM EDT
The Euro Stoxx 50 index appears to be in a strong position headed into the rest of this week as global risk appetite returns on news of a proposed infrastructure stimulus bill out of the United States. Price action since Monday’s open is nearly 3% higher for the index and appears set to take advantage of the bullish risk-on environment seen across global markets.
EU 50 INDEX (15-MIN PRICE CHART)
(Click on image to enlarge)
Source: IG Charts
Currently, the index sits at 3236.74, directly under its 61.8% Fibonacci retracement level. This follows Monday’s price action where the index pivoted higher after touching its 50% retracement level intraday before price action rallied to close Monday’s session higher. Bulls will look to continue probing higher in the coming days and aim for the recent multi-month high recorded last Monday at 3399.04 when the index briefly rose above its 200-day moving average.
EU 50 INDEX (DAILY PRICE CHART)
(Click on image to enlarge)
Source: IG Charts
While a break above the previously mentioned multi-month high would put the index in a better position for bulls technically, the fundamental backdrop is still delicate and trader sentiment seems fragile to changing headlines. Furthermore, a breakdown at this level would likely sap bullish sentiment and allow bears to retake positive price action claimed earlier this week.
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