German Gloom Meets US Bloom: Futures Face PCE Friday

The GER 40 Index Futures (EUREX: FDAX) edged lower on Thursday, mirroring a broader European sell-off despite remaining close to record highs. Today’s performance reflects a marginal increase of 0.01%, offsetting the week-to-date decline of 0.6%. Last week witnessed a positive trend, recording a gain of 0.65%, marking the second consecutive week of upward movement. 

Profit-taking and economic anxieties overshadowed the second consecutive week of gains. German retailer sentiment unexpectedly dipped in December, highlighting consumer caution during the holiday season. This adds to concerns about a fragile German economy, further pressured by the recent decline in the Ifo business climate. 

Technical Analysis (4-Hour Chart):  

The GER 40 Index Futures, currently trading at 16,805, exhibit a complex 4-hour chart. While the price action recently broke the 20-SMA (green line) but remains above the 50-SMA (blue line) and 100-SMA (red line), the flat RSI at 46.27 suggests a cautious market. 

Short-term opportunities may arise if bulls sustain a push higher, targeting the 16,928 resistance level. Confirmation of bullish momentum could propel the index to the 17,080 resistance level. Conversely, sustained bearish pressure may lead to short-term opportunities towards the 16,720 support level, with a break potentially triggering a decline to the 16,615 support level. 


The GER 40 Futures Index navigates a tug-of-war between lingering bullish momentum and profit-taking anxieties. German economic concerns add to the near-term uncertainty. US data on Friday will be the next key catalyst. Bulls need a decisive break above 16,928 to extend the rally, while bears watch for a breakdown below 16,720. 

Sources: TradingView, Trading Economics, Reuters, Dow Jones Newswire. 

Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd, Registration number 2005/011130/07, and an Authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act 2002 (FSP No. 27231). Any analysis/data/opinion contained herein are for informational purposes only and should not be considered advice or a recommendation to invest in any security. The content herein was created using proprietary strategies based on parameters that may include price, time, economic events, liquidity, risk, and macro and cyclical analysis. Securities involve a degree of risk and are volatile instruments. 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. When trading or investing in securities or alternative products, the value of the product can increase or decrease meaning your investment can increase or decrease in value. Past performance is not an indication of future performance. Trive South Africa (Pty) Ltd, and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered from using or relying on the information contained herein. Please consider the risks involved before you trade or invest.