The Coming EU Recession into 2028, Mercedes BENZ $MBG Triple TopThe principal pillar of the European economy is Germany, recognized as its wealthiest nation.
A parallel can be drawn to the adage regarding America: when it experiences a minor setback, the global economy often faces significant repercussions.
It is often asserted that the essence of "Deutschland" is deeply rooted in its automotive industry, leading to its moniker as "Autoland." German automobiles have consistently been esteemed as the finest globally.
In fact, the most thriving economic engine in Europe has been heavily dependent on the automotive sector, and the initiatives aimed at addressing climate change have been likened to the act of vanquishing a vampire—driving a stake through its heart.
Volkswagen, the biggest car maker in Europe, is warning that it might have to cut thousands of jobs and close some factories in Germany. This is happening because they are having tough talks with unions about rising costs.
The push for climate-friendly cars has really affected how many people want to buy new vehicles, and they are also facing strong competition in the electric car market. The news about job cuts and possible factory shutdowns is causing a big stir around the world.
Other car companies like Mercedes Benz, BMW, and Ford are also making cuts and letting employees go. Volkswagen is planning to lay off tens of thousands of workers and is even thinking about closing some factories, which is a big deal. Bosch, the largest auto parts supplier in the world and a major employer in Germany, is also cutting hours and pay for around 10,000 workers. Even Meyer Werft, a shipbuilding company that has been around since the 1800s, recently needed a huge bailout of $423 million to stay out of bankruptcy.
The economic strategies implemented by Brussels have significantly weakened the overall economy of the European Union. Germany has remained committed to the traditional Mercantile economic model, maintaining elevated tax rates to curb inflation while producing goods for export to generate profits.
In 2023, the automotive sector is projected to represent as much as 17% of Germany's exports. This sector has created over 750,000 jobs. However, German manufacturing has struggled to achieve a full recovery since the COVID-19 pandemic in 2020, currently reaching only about 90% of its pre-pandemic output.
Eurostoxx
EUROSTOXX broke the DownTrend Line.The EURO STOXX 50, which serves as a benchmark for major eurozone companies, has been trading sideways in recent months, fluctuating between a strong support level at 4,730 and resistance at 5,099. After multiple tests of the support, the price has formed candles with long lower shadows, indicating a rejection of lower prices and buyer interest in maintaining levels above this critical point.
Recently, the index provided a significant technical signal by breaking the Downtrend Line that had been in place since previous peaks. This breakout is a strong indicator of potential short-term growth.
Main Scenario: Bullish
With the Downtrend line broken, the price now has the potential to target higher levels on the daily chart. The 5,000.00 area is the first key resistance to watch, followed by the previous peak at 5,099, which would confirm a stronger bullish trend.
Potential Bullish Movement:
Ideal Entry: A pullback to around 4,830.00 (near the broken downtrend line), followed by a bullish candle in that area, could signal a buying opportunity.
Primary Target: 5,015.00.
Secondary Target: 5,099.17.
Stop Loss: Below 4,740, with a more conservative option at 4,727.00 (indicating loss of support).
Important Indicators: Monitoring volume during the rally is crucial; low volume could indicate weakness in the breakout.
Alternative Bearish Scenario
Despite the bullish technical scenario, the market may reverse if the support region at 4,727.48 is broken. A consistent daily close below this level, accompanied by significant volume, would invalidate the bullish structure and could attract strong selling pressure.
In this case, a possible Sell Opportunity could appear if a daily candle closes below the 4,727.00 level. Possible targets would be:
4,500.00: Intermediate psychological and technical support. About 22700 points.
4,400.00: Next relevant support, observed in previous months. About 33700 points.
A Stop Loss could be put around 4,770.00, about 4300 points.
Warning Signs: Heightened global risk aversion, a declining macroeconomic situation in Europe, and ongoing weakness in industrial and consumer sectors could intensify selling pressure.
Macroeconomic Context
Europe faces a tough landscape. Germany, the region's primary economic driver, is grappling with an industrial slowdown and reduced consumption, impacting the competitiveness of its companies. These issues have lowered growth projections for the eurozone.
Additionally, escalating tensions with Russia present a significant geopolitical risk. As the European Central Bank seeks to balance inflation control with growth stimulation, uncertainty in both geopolitical and economic spheres continues to affect the markets.
The upcoming interest rate decision on December 12 may provide clearer guidance on the European Central Bank's future actions.
Disclaimer
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EURODOLLAR, SHORT TERM BUY POTENTIALEurodollar is seeing some stabilization in this price area. There is a support level around the 1.07 from last weeks price action. Consider buying the currency and selling in the 1.08 area.
This week ECB and FED meetings are up. While ECB hike is certain, dollar hike has a 30% probability and it wont probably realize, so there is some euro upside not currently priced in.
Joe G2H - Selling EU50Trade Idea: Selling EU50
Reasoning: Double top completed on the daily chart. Lower prices expected.
Entry Level: 4253.5
Take Profit Level: 4205
Stop Loss: 4275
Risk/Reward: 2.3/1
Disclaimer – Signal Centre. Please be reminded – you alone are responsible for your trading – both gains and losses. There is a very high degree of risk involved in trading. The technical analysis , like all indicators, strategies, columns, articles and other features accessible on/though this site is for informational purposes only and should not be construed as investment advice by you. Your use of the technical analysis , as would also your use of all mentioned indicators, strategies, columns, articles and all other features, is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness (including suitability) of the information. You should assess the risk of any trade with your financial adviser and make your own independent decision(s) regarding any tradable products which may be the subject matter of the technical analysis or any of the said indicators, strategies, columns, articles and all other features.
Joe Gun2Head - EU50 Correction expectedTrade Idea: Selling EU50
Reasoning: Major resistance on the weekly chart
Entry Level: 4393
Take Profit Level: 4347
Stop Loss: 4412
Risk/Reward: 2.25/1
Disclaimer – Signal Centre. Please be reminded – you alone are responsible for your trading – both gains and losses. There is a very high degree of risk involved in trading. The technical analysis , like all indicators, strategies, columns, articles and other features accessible on/though this site is for informational purposes only and should not be construed as investment advice by you. Your use of the technical analysis , as would also your use of all mentioned indicators, strategies, columns, articles and all other features, is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness (including suitability) of the information. You should assess the risk of any trade with your financial adviser and make your own independent decision(s) regarding any tradable products which may be the subject matter of the technical analysis or any of the said indicators, strategies, columns, articles and all other features.
EUROSTOXX has incredible upside potential.An often overlooked index, the EURSTOXX has been on a rising 1W MA50 (blue trend-line) since late January. This is a major Bull rally continuation signal as it matches the pattern of four prior uptrends of the past 10 years. The 1W RSI has turned neutral and during Bull Cycles, this is always a strong signal to enter. We are expecting a peak on this rally close to the 1.618 Fibonacci extension.
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EURO STOXX 50 Weekly Forecast Analysis 28 Nov-2 Dec 2022 EURO STOXX 50 Weekly Forecast Analysis 28 Nov-2 Dec 2022
We can see that this week, the current implied volatility is around 3.05% , down from 3.16% from last week.
According to ATR calculations, we are currently on the 6th percentile, while with VDAX we are on 1st percentile.
Based on this data, we can expect on average, the movement from open to close of the weekly candle to be :
In case of bullish - 2.2%
In case of bearish - 2.3%
With the current IV calculation, we have currently 19.2% that the close of the weekly candle is going to finish either above
or below the next channel:
TOP: 4077
BOT: 3825
At the same time, taking into consideration the high/low touch calculation from the previous values, we can expect for this week:
25% chance that we are going to touch the previous low of the weekly candle of 3980
75% chance that we are going to touch the previous high of the weekly candle of 3900
Lastly from a technical analysis point of view, currently 78% of the moving averages rating, are insinuating we are in a BULLISH trend.
Euro Stoxx 50 Index bullish extensionEURO STOXX 50 INDEX: Potential for bullish extension towards 3,950 and 4,000 in the short term (5 to 25 days). This can be technically supported by the fact that current price is above its 4 and 40 week moving averages, the clearing above the 3,810 August (17th high) and the facts that both the 4 and 13 week rate of change indicators are above their respective zero lines (above zero), as well as the KST indicator crossing above its signal line. Therefore, long positions can be technically supported for the short term provided price can remain above the 3,810 support.
Jamie Gun2Head Idea - Selling EU50Trade Idea: Selling EU50
Reasoning: Looking for secondary aggressive selloff
Entry Level: 3602.0
Take Profit Level: 3476.0
Stop Loss: 3634.0
Risk/Reward: 3.94:1
Disclaimer – Signal Centre. Please be reminded – you alone are responsible for your trading – both gains and losses. There is a very high degree of risk involved in trading. The technical analysis , like all indicators, strategies, columns, articles and other features accessible on/though this site is for informational purposes only and should not be construed as investment advice by you. Your use of the technical analysis , as would also your use of all mentioned indicators, strategies, columns, articles and all other features, is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness (including suitability) of the information. You should assess the risk of any trade with your financial adviser and make your own independent decision(s) regarding any tradable products which may be the subject matter of the technical analysis or any of the said indicators, strategies, columns, articles and all other features.
Joe Gun2Head Trade - Gap fill on EU50Trade Idea: Selling EU50
Reasoning: Head and shoulders top with a gap fill
Entry Level: 3765
Take Profit Level: 3700
Stop Loss: 3785
Risk/Reward: 3.58:1
Disclaimer – Signal Centre. Please be reminded – you alone are responsible for your trading – both gains and losses. There is a very high degree of risk involved in trading. The technical analysis , like all indicators, strategies, columns, articles and other features accessible on/though this site is for informational purposes only and should not be construed as investment advice by you. Your use of the technical analysis , as would also your use of all mentioned indicators, strategies, columns, articles and all other features, is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness (including suitability) of the information. You should assess the risk of any trade with your financial adviser and make your own independent decision(s) regarding any tradable products which may be the subject matter of the technical analysis or any of the said indicators, strategies, columns, articles and all other features.
Joe Gun2Head Trade - False breakout on EU50?Trade Idea: Selling EU50
Reasoning: False breakout on EU50? Bears to return ahead of ECB meeting?
Entry Level: 3955
Take Profit Level: 3533
Stop Loss: 3621
Risk/Reward: 2.31:1
Disclaimer – Signal Centre. Please be reminded – you alone are responsible for your trading – both gains and losses. There is a very high degree of risk involved in trading. The technical analysis , like all indicators, strategies, columns, articles and other features accessible on/though this site is for informational purposes only and should not be construed as investment advice by you. Your use of the technical analysis , as would also your use of all mentioned indicators, strategies, columns, articles and all other features, is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness (including suitability) of the information. You should assess the risk of any trade with your financial adviser and make your own independent decision(s) regarding any tradable products which may be the subject matter of the technical analysis or any of the said indicators, strategies, columns, articles and all other features.
Eurostoxx Ultimate Pivot PointsReading charts is just one part of trading a bear market, another highly significant part is a solid understanding of market psychology, heuristics and biases. Having spent 14 years in a QE fuelled bull market where there were few inexplicable events and certainly no major forced liquidation events, it is easy to understand why so many participants get so excited about two days of asset flows out of commodities and into tech names. Yes, the market can go higher from here, yes it can go lower, but calling a major bottom and repeatedly getting attached to these short squeezes is all part of the psychological conditioning that has been happening to many over the last 14 years. Therefore we would suggest waiting for extremes where there is nobody else left to buy or sell, this is where the odds are stacked firmly in one's favour. Patience. Discipline. And more patience.
Eurostoxx UpdateJust a quick note on the Eurostoxx specifically to highlight:
1. We are now most definitely trading below the 2 year uptrend that was causing the ongoing corner formations, good to get that out of the way
2. The index has found support temporarily off the March lows and various highs from 2020
3. If this breaks, which we expect it will sooner or later, the target is the lower end of the red trend channel at 3000 as we mentioned yesterday. Should things develop into something more akin to 08/09 then we’re looking at the blue line down at 2400.
In the meantime, we just wanted to bring more clarity to the picture today by indicating the ideal entry point for further shorts (highlighted in the orange circle), that crash protection is a must if net long in our opinion, crash protection is probably a good idea in 6 months puts, and that if we trade higher towards the back of the uptrend we could be looking at a repeat of something like the 3830 to 3500 move that we saw in the first two weeks of June.
If we get there, we do not think we stay there for too long so we are starting to compile a list of single stocks in both Europe and US that look like they would be attractive if the market were down a further 10%. Those that are on our value list and print any form of accumulation indicator on the platform will be our best foot forward for clients. Stay tuned.
Sanofi - Pharming for profits?Sanofi
Short Term
We look to Buy at 95.00 (stop at 91.90)
The medium term bias remains bullish. Levels close to the 50% pullback level of 93.25 found buyers. Previous support located at 93.08. Further upside is expected and we look to set longs in early trade.
Our profit targets will be 104.35 and 110.00
Resistance: 95.16 / 98.22 / 104.35
Support: 93.25 / 93.08 / 92.78
Disclaimer – Saxo Bank Group. Please be reminded – you alone are responsible for your trading – both gains and losses. There is a very high degree of risk involved in trading. The technical analysis, like any and all indicators, strategies, columns, articles and other features accessible on/though this site (including those from Signal Centre) are for informational purposes only and should not be construed as investment advice by you. Such technical analysis are believed to be obtained from sources believed to be reliable, but not warrant their respective completeness or accuracy, or warrant any results from the use of the information. Your use of the technical analysis, as would also your use of any and all mentioned indicators, strategies, columns, articles and all other features, is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness (including suitability) of the information. You should assess the risk of any trade with your financial adviser and make your own independent decision(s) regarding any tradable products which may be the subject matter of the technical analysis or any of the said indicators, strategies, columns, articles and all other features.
Please also be reminded that if despite the above, any of the said technical analysis (or any of the said indicators, strategies, columns, articles and other features accessible on/through this site) is found to be advisory or a recommendation; and not merely informational in nature, the same is in any event provided with the intention of being for general circulation and availability only. As such it is not intended to and does not form part of any offer or recommendation directed at you specifically, or have any regard to the investment objectives, financial situation or needs of yourself or any other specific person. Before committing to a trade or investment therefore, please seek advice from a financial or other professional adviser regarding the suitability of the product for you and (where available) read the relevant product offer/description documents, including the risk disclosures. If you do not wish to seek such financial advice, please still exercise your mind and consider carefully whether the product is suitable for you because you alone remain responsible for your trading – both gains and losses.
Euro Stoxx 50 Entry Point For Equality ObjectiveIn this update we review the recent price action in the Euro Stoxx 50 nd identify the next high probability trading strategy and price objectives to target
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Eurostoxx 2022 Outlook - SX5EAs our first post it is essential to publish our longer term trend channel work as it provides the larger backdrop to our more detailed and shorter term work that we will be publishing in due course.
Starting with the Eurostoxx 50 Index (SX5E) we saw a 19% rally in as many trading days off the March lows only to run into resistance and the 3 month downtrend simultaneously around the 4020 level. That led to some decent chop back down and sideways with 3825 acting like a magnet for over a week. A brief pop higher from there back up to the 3925 downtrend we suggested was a great place to book long profits and errr on the side of caution and since then we are down ~4%.
So what next? We have a point of interest for bids coming in around current levels at 3750 which could take us into yet another corner between here and 3925 where we would switch back to a heavily hedged stance. Failure to do so will likely result in a revisit of the Covid uptrend which currently sits around 3500.
Is it time for EU stocks to outperform US stocks again?Over the last years there were periods when US stocks outperform EU stocks and periods were EU stocks outperformed US stocks. Almost like a perfect oscillation. Currently EU stocks have been consolidating for quite some time and especially German stock, so maybe all stocks do well and EU ones do better. The secular trend when adjusted for EURUSD rates too, is still down for EU up for US, but in the short term EU ones look better.
I should just say EU ones, because Swiss stocks also look fantastic. They've been actually doing very very well and they look a bit like the DAX. Since 2000 DAX is up 100% vs EUR and 145% vs USD. SMI is up 45% vs CHF and 155% vs USD.
So to me there are two scenarios here as I don't think there is much downside. These stocks are somewhat undervalued both against themselves and against the US stock market, plus the ECB is really printing money and rates are super low which makes the stock market much more attractive than anything else.
Crash MarketThe First signal of a market downturn was announced a few weeks ago by the japan Nikkei index
Bullish on SX5EEurostoxx is accelerating away, guessing that the helicopter money hit it first. This one has a lot of room to potentially grow. Be careful out there, all this growth in the major indices is purely speculative. Real sector recovery has been choppy and modest.
None of the above is financial advice, please do your own research - your trades are your trades.