Credit derivatives markets could be reserving some volatility for European CDS

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The chart of the synthetic ETF Xtracker Europe Swap has been forming a double top pattern that could suggest outright short-selling position against the ETF, that tracks Europe CDS and a blend of debt obligations, with exposures to the Euro area economy. The monthly time scale chart sees a Doji star candle testing the moving average line, that with much probability could be followed by further downside, as investors could be getting cautious about the shape and path to output recovery of the broader economy in Europe. The XTracker Europe Swap trendline can drift below the moving average going to test IKH Senkou A/B nuage support, possible range value 115<112,50. The MACD oscillator could be also providing a crossover sell signal, to appreciate the divergence between the trendline uptrend, against the MACD progressive drifting lower.