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European Markets Bounce on Friday but Remain in Downtrends

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All eyes are on the British Brexit vote this coming Thursday (June 23) on whether to stay in the European Union or leave. Latest polls show the "leave" vote in the lead. A relief bounce on Friday in Britain and Europe was encouraging, but not enough to turn their trends back up again. Chart 1 shows the British Pound gaining 1% on Friday after an upside reversal day on Thursday. Its trend since late May, however, is still down. It would have to clear its 50-day average to improve it short-term trend. Chart 2 shows a similar pattern in the London Times Financial Index (FTSE). The FTSE touched a four-month low early Thursday before rebounding. Initial overhead resistance exists at its May low near 6050. Moving average resistance is even higher. Eurozone stocks also rebounded on Friday but lost ground on the week. Chart 3 shows the German DAX still trading below its May low. The Euro also bounced.

John Murphy
About the author: is the Chief Technical Analyst at StockCharts.com, a renowned author in the investment field and a former technical analyst for CNBC, and is considered the father of inter-market technical analysis. With over 40 years of market experience, he is the author of numerous popular works including “Technical Analysis of the Financial Markets” and “Trading with Intermarket Analysis”. Before joining StockCharts, John was the technical analyst for CNBC-TV for seven years on the popular show Tech Talk, and has authored three best-selling books on the subject: Technical Analysis of the Financial Markets, Trading with Intermarket Analysis and The Visual Investor. Learn More
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