The Ger 40 Futures (EUREX: FDAX) have surged impressively, marking a 1.36% week-to-date gain and achieving a fresh all-time high.
Should this trend persist, it will mark three consecutive weeks of gains, reflecting robust market optimism. Recent reports from Europe’s largest economy have shown a slight cooling in inflationary pressures for January, alongside a marginal uptick in the unemployment rate past expectations to 5.9% for February. This easing of labour market pressures is expected to alleviate concerns over inflation, providing a favourable environment for equities.
However, unexpected declines in Germany’s retail sales, continuing a streak of contraction, may pose a challenge to market sentiment. Traders are now turning their attention to key economic indicators, such as the U.S. Federal Reserve’s Personal Consumption Expenditures (PCE) data and Germany’s Consumer Price Index (CPI) reading for January, ahead of broader Eurozone inflation data expected later in the week. These releases will likely shape market sentiment and influence future trading decisions in Ger 40 Futures.
Technical
The Ger 40 Futures have exhibited impressive resilience, maintaining a strong uptrend trajectory well above the 100-day moving average.
This bullish momentum traces back to robust support at 17069, propelling the index futures to breach the 17434 resistance level and surge ahead. Notably, the breakthrough extended to key technical levels, including the 61.80% Fibonacci Extension Golden Ratio, affirming the strength of the bullish momentum.
Should this upward momentum persist, attention may shift towards the 100% extension level as a potential upside target. Conversely, given the overbought RSI conditions, selling momentum could be imminent. In the event of bearish pressure, traders might look to the 61.80% Extension level as a point of interest to the downside.
Summary
The Ger 40 Futures surged to a fresh all-time high amid market optimism. Strong support at 17069 propelled the index futures, breaching the 17434 resistance level. Attention will likely be on key technical levels including the 61.80% Fibonacci Extension Golden Ratio and potential upside target at 100% extension level.
Sources: Bundesagentur für Arbeit, Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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