GER30 - H4
The German index dropped in January, as global equities were rattled by geopolitical tensions, inflation jitters and monetary tightening prospects. The new month starts in a better mood as the index run its fifth profitable day, despite manufacturing activity retreating to 59.8 in January, from 60.5 prior.
GER30 is at a critical technical point as it tries to move beyond the daily Ichimoku Cloud, EMA200 and downward trend-line from January's record highs, an area we had highlighted form the last analysis.
A break above can accelerate the move towards 15,973-15,600, but it may be early to talk about new all-time highs (16,302).
Investor sentiment seems to be in a good place, but uncertainty ahead of Thursday's ECB monetary policy decision may cap the upside, while the situation in Ukraine could weigh again.
As such, GER30 could be pressured to new weekly lows (15,539), but a catalyst will be needed for a larger decline back towards the 14,840-10 region.
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.