The Ger 40 Futures (EUREX: FDAX) have surged to unprecedented heights, now poised for their fifth consecutive week in positive territory. With a week-to-date gain of 77 basis points, these futures are riding a wave of optimism driven by key economic indicators from Europe’s largest economy, Germany.
Confirmation of a slowdown in the growth of consumer prices in Germany, coupled with a decline in wholesale prices, has buoyed equities. This positive momentum comes amidst a high-interest rate environment aimed at curbing inflation, potentially signalling the efficacy of such measures and paving the way for anticipated rate cuts. Investors keenly watch these developments as they navigate through market dynamics influenced by economic indicators. As the Ger 40 Futures hit all-time highs, they offer a lens into broader market sentiment and the interplay between economic fundamentals and financial markets.
Technical
The Ger 40 Futures are experiencing a strong uptrend, which is evident through an ascending channel pattern and trading above the 100-day moving average. The recent rally propelled prices to an all-time high at 18024, yet overbought conditions prompted a retracement, now resting at the 23.60% Fibonacci level.
The establishment of support at the 17690 level, aligned with the lower boundary of the ascending channel, highlights bullish sentiment. Should the current retracement find support at the 23.60% Fibonacci level, it could signal a potential retest of the all-time high if bullish momentum resumes. Conversely, sustained bearish pressures may see the 50% Fibonacci level serving as a point of interest to the downside.
Summary
The Ger 40 Futures continue their upward trajectory, buoyed by positive economic indicators from Germany. With support at 17690 and resistance at 18024, traders monitor the retracement, poised for a potential retest of all-time highs if bullish momentum persists, reflecting market optimism amid changing economic conditions.
Sources: Federal Statistical Office, Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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