GER30 Steadies after a Volatile Start to the Week

  • GER30
    (${instrument.percentChange}%)

GER30 Analysis

The German Index started the week with a plunge and two-month lows (13,280), as markets grappled with the G7 commitment to phase out oil imports from Russia[1]. However, sentiment showed improvement and GER30 rebounded on Tuesday, while today, it steadies following the volatile weekly start.

Asian-Pacific stock markets provide a positive lead-in, helped by news that US President Biden is considering a removal of some tariffs against China imposed by his predecessor. When asked during his press conference on the economy, he said that "We're discussing that right now. We're looking at what would have the most positive impact". [2]

Furthermore German CPI Inflation did not offer any surprises today, since it rose 7.4% in April year-over-year, in line with the preliminary reading and slightly above the March 7.3% print.
Earlier in the day, China which is the world second largest economy and Germany's key trade partner, saw its April inflation jump 2.1% year-over-year, form 1.5% prior. Markets not turn their attention to US CPI, due at 12:30 GMT.

Given the broader upbeat mood, GER30 may be able to tackle 50% Fibonacci of its November/High Low drop (13,805), but it will need a catalyst for a bigger recovery that would challenge the EMA200 and the daily Ichimoku Cloud (at around 14,080-14,180).

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The index seems to lack conviction and there are still many risk factors that could dampen sentiment, such as the war in Ukraine, growth fears and the Covid-19 situation in China. Furthermore, despite yesterday's rebound, it has so far failed to surpass key 38.2% Fiboanacci level and cover Monday's gap.

Bias remains on the downside and bears can push back towards (13,280), but the 13,000 region seems tougher at this stage.

Nikos Tzabouras

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.

References

1

Retrieved 11 May 2022 https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/08/g7-leaders-statement-2/

2

Retrieved 01 Jul 2022 https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/05/10/remarks-by-president-biden-on-the-economy-5/

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