The GER30 weekly has charted a higher trough, followed by a higher peak. This is an uptrend. Its RSI remains on the bullish side of 50 (green rectangle).
Two scenarios that will end the uptrend include:
The index dropping below 13,688 (blue dashed line); it would chart a lower trough (LT1). This is a low probability event, as the index would need to drop 11% from current levels without pause.
The GER30 charting a lower peak (LP), followed by a lower trough (LT) (red dashed lines). This is more plausible than scenario 1. It may also be more destructive as this scenario is a defined down trend, whereas scenario 1 ends the uptrend but does not begin a new downtrend.
We note trends persist. Pullbacks are accompanied by a narrative. However, the weekly GER30 trend is robust. A pullback in the GER30 at this point will be corrective until proven otherwise.
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.