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
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