Can German Equities Bounce Back?

This week, a modest 56 basis point climb emerged, driven by an improved sentiment toward the Eurozone’s economic outlook in December. However, this optimism encountered a setback due to unexpected reports from Germany’s industrial production, revealing a concerning 0.7% decline in November, marking the sixth consecutive monthly decrease. This downturn impacted the index futures, halting a three-day ascent. 

The Ger40 Futures (EUREX: FDAX) navigated a challenging landscape marked by a three-week downturn, now showing signs of potential respite.  

The tug-of-war between improving sentiment and the unexpected stumble in industrial output underscores the delicate balance influencing the Ger40 Futures. Now, traders keenly await Thursday’s US inflation figures, anticipating cues that could shape the Federal Reserve’s stance on potential interest rate adjustments. 


The Ger40 Futures surged to a fresh pinnacle, marking a significant resistance level at 17123. This milestone establishes a crucial point in the current market dynamics. Notably, the previous peak at 16615 has now transitioned into a supporting role after a breakthrough, retest and subsequent rejection amid oversold conditions. This pivotal level is now identified as a key support zone. 

The prevailing bullish momentum hints at a potential retest of the all-time high, as market sentiment remains predominantly optimistic. A breakthrough above the 61.80% Fibonacci Retracement Golden Ratio on high volume could reinforce the likelihood of an upward trajectory if bullish pressures persist. Conversely, the 16615 level might attract attention as a potential target in a downside scenario should bearish traders gain momentum.  


The Ger40 Futures depict a nuanced picture, grappling between renewed optimism from an improved Eurozone sentiment and concerns stemming from Germany’s industrial production decline. The crucial resistance at 17123 and the supporting role of 16615 unveil a tug-of-war between bullish and bearish sentiments. The trajectory hinges on the sustained bullish momentum or potential bearish pressures in the coming sessions, closely tied to evolving economic indicators and the Federal Reserve’s cues on interest rate adjustments. 

Sources: European Commission, Federal Statistical Office, Reuters, TradingView 

Piece Written By Nkosilathi Dube, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.

Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.

CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.