Given the risk-off sentiment that is pervasive in financial markets, the DAX is outperforming US blue chips. Consider the weekly relative strength (RS) of FXCM's DAX CFD, the GER30, to its Dow Jones Industrial Average CFD, the US30. Here, the GER30 is the numerator and the US30 is the denominator of the ratio. The RS has charted a higher trough followed by a higher peak, indicating significant relative strength or outperformance by the GER30 over the US30. The same price pattern is evident against FXCM's S&P 500 CFD, the SPX500, as well as its Nasdaq CFD, the NAS100.
The resilience of the GER30 is reflected on the daily chart on the left. Here, the index heikin ashi chart has moved from its area of weakness into its neutral area (green rectangle). On a relative basis this is a step forward. Moreover, heikin ashi candles are trend following indicators and are bullishly blue. The hourly chart on the right also has a a story to tell. Of note, it's stochastic is positioned above 80 (blue arrow). The longer that it maintains this position the more support there will be for the index. If it rolls over and falls out of the 80 area, the momentum will be considered to be waning.
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.