FxWirePro: Eurostxx50 might test 3500 as Draghi delivers

We at FxWirePro haven’t been much of a bull when it comes to Eurostxx50. We see severe downside risks to the European Union as well as the Eurozone. Several time bombs are ticking in the region; one being Greece, where debt problem just refuses to subside and keep on surfacing from time to time. The others are weak banking sector along with political risks in Germany and France. And after last week’s loss in the referendum, add Italy to the mix.

Saying all that, we also see the price action suggesting otherwise, especially after European Central Bank delivered another dovish policy action. Further potential buying of €540 billion was delivered with no cap on the levels of yield along with the inclusion of 1-year bond in the mix. One of our models based on price actions are suggesting the Eurostxx50 is might test 3500 going ahead well before our long-term prediction of a decline of 50 percent. The very next target is 3280 area. The Eurostxx50 is currently trading at 3193.