FXCM's DAX CFD, the GER30, has charted a lower peak (LP) followed by a lower trough (LT) on its weekly chart. This pattern is the definition of a downtrend. Given the higher timeframe, this infers that the GER30's primary trend is down. The stochastic has turned but is still relatively benign at a reading of 54. However, if it declines into its lower quintile (green rectangle), this will apply bearish pressure to an already weak index.
The GER30 daily chart on the left indicates weakness too. Its price is in the weak area between the lower blue and lower red bands. Moreover, the stochastic is below 20 (red rectangle), which means a strong bearish momentum. It will continue to act on the index if it maintains this position.
The hourly chart on the right shows that the GER30 has bounced into a confluence of resistance. This level includes the central pivot (P) and price support turned resistance (blue shaded horizontal. If the trend-following indicators and stochastic turn down (black ellipses), the short-term traders will align with the longer-term trends.
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.