The GER30 daily chart trades between the lower blue and red bands in its bearish channel. Moreover, the daily momentum is down, with the stochastic under 20 (green rectangle). The longer this persists, the greater the pressure facing the index.
The hourly chart shows a rally amidst this daily weakness, which may present an opportunity. The following three conditions will suggest that the hourly price action was a rally in a broader downtrend:
- A bearish cross of the hourly stochastic (already charted at 1).
- A bearish cross of the EMAs at R2 pivot resistance (still to chart at 2 ).
- A decline by the hourly stochastic to the 20 levels (still to chart at 3).
Germany's most recognised leading indicator, the ifo Business Climate Index, declined for the third month. It printed today at 88.5 (88.7), the lowest reading since June 2020.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.