FXCM's DAX cfd, GER30, has charted a strong bullish reversal pattern.
GER30 reached an all-time high of 16,298.30 during the week of 13 November 2021. Following, the index capitulated to a low of 11,795.54 during the first week of October 2022. This was a decline of 27.6%.
Since then, the index has rallied, trading at 15,372, which is 30% up from its October low. Price action charted a large accumulation pattern.
A head and shoulders bottom is discernible. The pattern's neckline slopes upwards. This suggest strong accumulation. The index's RSI is above 50, denoting an underlying positive momentum. As long as it maintains on this side of the indicator, the chance of higher prices is improved.
The pattern's measured move gives a target of near 17,970. This is close to 17% above the current levels and will be a new high if achieved. Measured moves are academic - they may or may not be hit. However, they connote the line of least resistance. We remain bullish 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.