The German index inches towards the conclusion of a profitable month, extending the recovery of the previous quarter, It faces difficulties today though, after the release of preliminary data that showed an 0.2% q/q GDP contraction in the fourth quarter.
The index has performed very well recently, helped by optimism around China and the mild winter in Europe, against the ECB's aggressive monetary tightening. The central bank has already delivered 250 basis points worth of rate hikes since the July lift-off and has signaled another 0.5% increase at Thursday's meeting – a decision that can spur volatility and determine the trajectory of GER30.
It reached thirteen-month highs earlier in January but has since lost its vigor and faces difficulties above the 15K mark, as hawkish ECB commentary contains the strength. This creates risk for a pullback to the EMA200 (at around 14,700), but a strong catalyst would be required for a correction towards and below 14,450. Above the EMA200, bulls are in control and can push for higher highs (15,275), but fresh impetus is needed for taking 15,739 out.
Senior Financial Editorial Writer
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.