Macro: Sandcastle economics
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Technical Update - AEX25, BEL20 and CAC40 finding support after heavy selling. But for how long?
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
AEX25 was hit with heavy selling Tuesday but the Index managed to close above support at 679. A close below is likely to fuel new sell-off down to June lows. Some support at 664.
RSI is showing negative sentiment and a close back below 40 will further confirm the bearish outlook. For AEX to reverse the downtrend a close above 704 is needed.
BEL20 was rejected a few cents below the 0.618 retracement at 3,745 and was hit by heavy selling. Now finding support at the 0.618 downward retracement at 3,598. RSI is showing negative sentiment and a close back below 40 will further confirm the bearish picture. A break below 3,594 is likely to ignite a new sell-off down to 3,500.
If BEL20 closes below 3,500 there is no strong support before around 3,235. Minor support at 3,332. BEL20 needs to close above 3,766 to reverse this bearish picture.
CAC40 bounced to the 0.618 retracement only to be rejected and hit by massive selling. Finding support at 0.5 retracement a break below 6,183 is likely to fuel a new sell-off that is likely to take CAC40 to support at around 6,031.
A close below 6.000 is very likely to push the Index to test June lows at around 5,786
RSI showing bearish sentiment and no divergence supports the bearish outlook. A close below 40 will further support the bearish picture. A close above 6,395 will demolish this bearish scenario
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