GER30 Top-Down Analysis – 07 December 2021

  • GER30

Weekly Chart

The DAX sold down heavily during the week ending 26 November. Last week was defined by uncertainty and a spinning top charted – bulls tried to take price higher, bears tried to take price lower, but the market closed relatively flat. Participants pay close attention to the 14,900 area, which is an identified area of support. Last week's candle (aqua arrow) is the lowest candle in a three-candle cluster. If the price closes above its high (aqua horizontal), it will meet our definition of a swing low. This will only be confirmed when the weekly candle closes on Friday. Interestingly, this is at the support area. The RSI oscillator has reversed and is heading back towards its positive side of 50. The stochastic has a lagging factor applied and is still bearish. In this regard, a near-term movement towards the blue boxed area will be bullish, supportive of the swing low scenario and the RSI's movement. However, a movement towards the red boxed area will be bearish, and will likely be accompanied by weaker price action.

Past Performance: Past Performance is not an indicator of future results.

Daily Chart

The DAX daily chart indicates potential accumulation after the recent selloff. The expansion in the Bollinger bands accompanied the increase in volatility as price moved into the area of weakness, between the lower blue and lower red bands. In order, for a downswing to develop, the price would typically need to maintain this position. However, today's price action (still to complete) has moved from the weak area into the neutral area, between the blue bands. A close in this area will be a positive development.

Past Performance: Past Performance is not an indicator of future results.

Hourly Chart

The GER30 H1 chart is bullish. The short green moving average is above the mid orange moving average, and the mid orange moving average is above the long red moving average. Moreover, the moving averages have angle and separation, which denotes strong momentum. This is confirmed by the stochastic which is positioned in its upper quintile (blue rectangle). However, of concern, is the RSI. It is overbought (aqua ellipse) and will need to normalise, suggesting further upside may have a short-term ceiling. If the potential swing low on the weekly materialises, and the movement from the weak area to neutral on the daily is confirmed, a normalisation in the H1 RSI will be considered as positive. It will dissipate any short-term exuberance and potentially set up the platform for further upside.

Trade the News: View our Economic Calendar

Past Performance: Past Performance is not an indicator of future results.

Featured Image by Gerd Altmann from Pixabay

Russell Shor

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.


Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.

${} / ${getInstrumentData.ticker} /

Exchange: ${}

${} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}