Euro Stoxx 50 to suffer a substantial drop to 3760 on a breach of 4000/3965 – SocGen

Euro Stoxx 50 could stage a rebound in the near-term but the risks are skewed to the downside. Failure to defend 4000/3965 would clear the path for a decline towards the 3760 mark, economists at Société Générale report. 

Multi-month trend line near 4170pts to cap 

“Euro Stoxx 50 is now in vicinity to the neckline of the formation at 4000/3965pts. This is a crucial support zone.” 

“A short-term bounce can’t be ruled out however the multi-month trend line near 4170pts could cap.” 

“In case the index fails to defend 4000/3965pts, there would be a risk of a deeper downtrend towards 3910pts, the 23.6% retracement from 2020 and 3760pts.”