Since the 9th June, European stock have experienced a decent rally on the back of Greek optimism and a slowdown in rising yields. The rally has unfolded unexpectedly taking out the May low support turned resistance on up towards testing the broken 8-month trend-line around the 11400 level.
Looking at CFD trading, the testing of broken trend resistance does present a potential opportunity to initiate shorts once the momentum begins to turn lower on the sub-Daily time-frames (1/4hr). If price can’t turn materially lower from here by tomorrow’s close, the weekly chart will go down as showing a very large reversal bar. This would bring in reason for consideration that we have seen a tradable low a bit sooner than we expected. For now, we will look to see how well the rally can maintain, should it turn lower today or early tomorrow we will look for potential shorting opportunities.
The jitters in the bond market still stand to provide volatility, but Mario Draghi said it best “expect a lot of volatility”.
With talks intensifying we can all choose whether or not there will be an agreement. I am still confident that there will be one. I have taken a long position, moved stop to break even and will sit and wait with perhaps the view of adding.
Support and resistance
|34 Hour EMA||11182|
|200 Day EMA||10811|
A clear bounce from the 200 daily EMA and median line, I am watching to see if we can continue bullish momentum. I have taken a long trade.
Another technical bounce from an unrelated fork to the median line above. There were many reasons to see a move the the upside and I mentioned in yesterday article.
Another bounce from the weekly S2, the third key technical bounce.
We are currently under the daily R1, but yesterday has stretched the levels significantly.