GER30 - H1
The German index sheds around 1% and runs its fourth straight losing day, breaching key technical levels, amidst poor investor sentiment. Markets continue to worry about the pandemic in Europe - and Germany in particular - in the aftermath of Austria's lockdown, while improved PMIs from Eurozone and Germany did little to help.
Risk-off mood provided the fuel for the breach of key 15,950-18 area, in line with Monday's analysis. This is the 23.6% Fibonacci of the "October lows/November record highs" rise, which creates increased risk for deeper correction towards 15.732-26, but we are cautious at this stage for a broader decline that would threaten the 15,493 support.
The move looks overextended and a rebound above 16,000 would be reasonable, but significant improvement in sentiment would be needed for a move back above the EMA100 (at around 16,150).
Near-term bias is tilted on the downside, but as long as GER30 can contain this corrective move to shallow levels (above 38.2% Fibonacci), it can eventually find impetus to push towards its record highs (16,302).
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Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.