Technical Analysis - EU 50 index slides but does not hit new lows

The EU 50 index (cash) continues to be dominated by bearish forces, trading below its moving averages and a downtrend line drawn from the January peak. On the bright side, sellers were not strong enough to punch to a new low beneath 3,385, which offers some hope that the selling pressure may be losing power. 

This sentiment is also reflected in short-term oscillators, where the RSI has rebounded from near its 30 line. The lower Bollinger band has also defended the price action lately. 

If the selloff continues, initial support to further declines may be found near the February low of 3,385. In the case that this zone is violated though, that would signal a continuation of the broader downtrend, opening the door towards the 3,300 region. 

Now in the scenario that buyers retake the reins, their first obstacle would probably be the 3,690 zone. If they penetrate above it, then the spotlight would turn towards a fortified territory that includes the 3,820 level, the 50-day moving average, and the aforementioned downtrend line. 

In short, the outlook is negative and a break below 3,385 could give the bears more fuel. For the picture to turn back to neutral, the bulls would need to push above the 3,820 region and the down-sloping line. 

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