By our BofAML measures ALL of the EUROstoxx dumped in the unwind have been repurchased in last 48 hrs!
Bottom Line: Our Equity Futures desks have seen significant buying of Eurostoxx over the last two sessions. Almost the entire amount of the QE unwinds we saw in April (around 30% of initial QE buying was unwound in the April rout) has been bought back in just these last 2 sessions. Positioning is now back to March peaks based on the flow we have seen. Additionally, our technical strategists are quite bullish on Eurostoxx 50 after we broke 3605 yesterday and also moved above the key 50 & 100 day moving averages.
SX5E Technical Breakout
Our Equity Technical Strategists believe thatEurostoxx (SX5E) attempted a key breakout yesterday and remain bullish towards 4000 so long as the 3500-3225 level holds.The SX5E held this support in early and mid-June with bullish oversold divergences on daily stochastic and remained above the rising 200-day MA which is a bullish setup.
Yesterday’s break above the 3589-3605 area on the EURO STOXX 50 (SX5E), if sustained, has the potential to confirm a near-term double bottom and end the downside consolidation from late April.
Holding this breakout would favour a move to 3690 and 3780-3836 initially and then toward 4000 and beyond.
Failure to hold the breakout would suggest backing-and-filling toward 3484, which is ahead of support at the June lows of 3410-3374 and the rising 200-day MA near 3371.
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Chart Talk: EURO STOXX 50 (SX5E) attempts key breakout
