Eurostoxx 50 Index Surges Above 5000 Points Despite Negative Economic News

The Eurostoxx 50 index, a key benchmark for the European stock market, has broken through the psychological barrier of 5000 points in early 2025. This upward movement is notable, given the negative economic news emanating from Europe. According to recent data from ForexFactory, industrial orders in Germany declined by 5.1% month-on-month, exceeding expectations of a 0.3% drop. Additionally, retail sales in Germany fell by 0.6% month-on-month, contrary to expectations of a 0.5% increase. France also reported a worsening government budget balance.

Technical Analysis of the Eurostoxx 50 Index

A technical analysis of the Eurostoxx 50 index chart reveals that the current value is trading above a resistance line that dates back to spring 2024. This resistance line has been a significant hurdle for bulls, who have made two previous attempts to break above it but failed to sustain their gains. The chart shows these attempts marked with arrows. The current breakout above the resistance line may be a sign of strength, but it is also possible that further negative economic news from Europe could trigger bearish activity.

Potential False Breakout Pattern

If the Eurostoxx 50 index is unable to hold above the red resistance line, it may form a false breakout pattern. This could be the third unsuccessful attempt to break above the resistance line, potentially leading to a reversal in the market trend. Investors should be cautious and monitor the market closely for any signs of weakness.

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Conclusion

In conclusion, the Eurostoxx 50 index has broken through the 5000-point barrier despite negative economic news from Europe. While the technical analysis suggests a potential breakout, it is also possible that further negative news could trigger a false breakout pattern. Investors should remain cautious and monitor the market closely for any signs of weakness.

Source: Fxopen.com

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