The Euro Stoxx 50 stock index has declined considerably after touching the 3460 resistance level, recording two straight bearish weeks. On Friday, the price posted a five-month low of 3274.70, while it is currently not far above that nadir. The momentum indicators are supportive of the bearish picture, with the RSI standing below the threshold of 50 and approaching the 30 oversold level. Moreover, the MACD oscillator is falling sharply below the trigger and zero lines.
Immediate support is coming from the 3274.70 support level, while an extension to the downside would increase the bearish pressure, hitting the 3210 level, identified by the bottom on February 2017.
In the case of an upward attempt, the index could run towards the 3340 resistance barrier, taken from the troughs in the previous two months. A climb above this strong level would ease downside pressure in the short term and drive the price until the 50-day simple moving average (SMA) near 3434 at the time of writing. Slightly above this level, the 3460 resistance could act as a major obstacle for the bulls.
In the bigger picture, the index is neutral over the last seven months, but the risk is to the downside as it holds below the 50 and 200-day SMA. The bulls would need to retake the 50-day SMA in order to regain the upper hand.
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