The bear-market rally that stocks have enjoyed for the last 10 weeks is over, Robin Griffiths, technical analyst at Cazenove Capital told CNBC Monday. As a consequence, the FTSE-100 index and the euro will pare gains. In the meantime, investors should buy corporate bonds, he suggested.
"It's probable that the bear-market rally from the March 9 low has ended," Griffiths said of the FTSE-100 index. "It didn't have to end right now and it is just possible to get a little bit more."
The UK index will retrace by half of what it has put on instead of simply falling back to the March low, he said.
"At roughly halfway back down again, you will see some buying," Griffiths predicted, adding that the market could rally through to September after the brief dip.
The UK index will then fall after "topping" in September, to finish lower by year end, Griffiths told "Squawk Box Europe".
"The tradeoff between what you can get for corporate bonds against what you can get for equities now favors the corporate bonds quite clearly," he told CNBC.
"It's going to be a rocky road ahead for the euro," Mark O'Sullivan, director of dealing at Currencies Direct said. The euro zone currency could come under pressure and possibly retest $1.30 against the dollar, he added.
O'Sullivan favors the yen over the euro.
Griffiths agreed with O'Sullivan, saying that the euro-yen cross is closely correlated to the stock markets, and as stocks fall, so will the European currency.