The German index comes from eight consecutive profitable week, its best streak in four years, heading towards another profitable month. However, the current week started with losses as markets access the pandemic situation in China, while softer European inflation does not do much to help.
Preliminary figures showed that the Consumer Price Index eased to +10% y/y in Eurozone and Germany in November, from the +10.6% and +10.4% final prints for October respectively. The European Central Bank has hiked rates aggressively since the July lift-off, but has been vague around the terminal and based on recent commentary there is some division as to the size for the next move.
GER30 has been losing steam over the last several days and runs a losing week so far, which creates risk for a slide towards 14,200-12 and the 23.6% Fibonacci of the November advance. A break below it could accelerate a correction to 38.2% Fibonacci (14,000-13,983), but a catalyst would likely be required for that.
Despite the poor weekly start, GER30 finds support and has the ability to push for higher highs (14,583), although a deeper pullback may be required for that and further gains towards 15,000-14,960.
In any case the rest of the week is loaded with key events that can affect the trajectory of the index.
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.