Nathan BatchelorThe Europe 50 index remains under heavy downside pressure as the leading Blue-chip companies in Europe are sold off over coronavirus fears.
Europe 50 analysis shows the index could fall towards the 1,400 level now that the 2,640 support level has been broken.
Europe 50 medium-term price trend
The Europe 50 has fallen to its weakest trading level since 2012, with the index declining by nearly 40 per cent.
The index is closely watched by investors as a sentiment gauge as it covers 50 leading blue-chip stocks from 17 European countries.
Stoxx technical analysis shows that sellers have recently invalidated a huge bullish inverted head-and-shoulders pattern, placing the emphasis on further medium-term downside.
The daily time frame shows that the recent breakout below the 2,600 level invalidated the structure of an inverted head-and-shoulders pattern.
Key upcoming support is found at the 2011 yearly low, around the 1,970 level, and the index’s all-time low, around the 1,580 level.
Europe 50 short-term price trend
Stoxx technical analysis shows that the index is heavily bearish over the short term while price trades below the 3,440 level.
The one-hour time frame is showing that the Europe 50 is working within a falling price channel, and may soon test towards the bottom of the channel, around the 1,900 level.
Any upward corrective moves are likely to find resistance from the top of the falling channel, around the 2,450 level.
Extended technical resistance for the Europe 50 on the lower time frames is currently found at the 2,644 and 2,730 levels.
Europe 50 technical summary
Stoxx technical analysis shows that a major bearish breakout has occurred, after sellers broke through the 2,640 level. Bears may be targeting more losses below the 2,000 level.
