Short term
Trade view / 27 June 2016 at 5:19 GMT

EU50: Friday panic lows are in for a retest


The fall out from the Brexit vote was massive hitting core EU markets in epic proportions. The question at large is if this was a shock event or if it's part of events unfolding within the current negative trend - with the first being more positive for markets than the latter. 

Following the negative open Friday markets managed to rebound and the EU50.I climbed from 2,650 to 2,835 before pulling back and closing the trading of the day at around 2,757.

Looking at the hourly chart we can see that the bounce came in a three wave motion and that the following pull-back of that bounce stalled at the 2,732 pivot closing the day with a bullish hourly candle.

If today see prices establish itself below the 2,732 pivot price confirm the three wave bounce structure and odds are we are heading lower towards the Friday panic lows. Before those lows we have support at 2,704 and 2,679. If the lows were to break we have support at 2,627, 2,601 and 2,576.

The bullish angle to this tape is if price made a low late Friday and manages to establish itself above 2,836, if so there appears to be a shot at a gap close at 2,916. There is however quite a distance to the bullish pivot.

Management and risk description

The plan for the week will be to look in the direction of the larger trend which is pointing lower.

The current bounce is likely to stall and perhaps it has already, such signals would be given upon established price action below 2,732 from where this market is likely heading lower towards the 2,704, 2,679 and 2,653 support.

The risks to trading in the current environment is quite obvious, extreme volatility, possible central bank intervention and positive/negative news flow in the aftermath of the referendum. Trade small!


Entry: Sell below 2,732.

Stop: 2,783.

Target: 2,704, 2,679 and 2,653.

Time horizon: One to five days.

EU50.I daily chart
EU50.I daily chart
EU50.I hourly chart
EU50.I hourly chart
EU50.I daily development chart
EU50.I daily development chart
Source: Saxo Trader

— Edited by Adam Courtenay

Non-independent investment research disclaimer applies. Read more
27 June
Johan Berntorp Johan Berntorp
Just a re-cap of today's price action, zoom into a 5-minute chart.


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail