![](https://blog.trive.co.za/wp-content/uploads/2024/01/inv-1024-x-512-px-2024-01-24T154609.397.png)
The Ger 40 Futures (EUREX: FDAX) has staged an impressive recovery, shaking off a nearly 3% year-to-date loss to now trade flat for the year.
This turnaround was highlighted by a notable 1% gain in Wednesday’s trading session, indicative of renewed investor confidence. Germany’s manufacturing Purchasing Managers’ Index (PMI) played a pivotal role, climbing from 43.3 to 45.4 in January, potentially bolstering industrial stocks amid a brighter outlook for the manufacturing sector.
On the global stage, the weakening Greenback, shedding up to 50 basis points in the session, has spurred an increased appetite for risk assets. Traders appear to be adjusting their positions in anticipation of crucial economic data, including PMIs, jobless claims, and the eagerly awaited PCE Price Index—a key metric for the Federal Reserve’s inflation assessment. Additionally, the upcoming interest rate decision from the European Central Bank looms large, adding an element of anticipation as market participants keenly watch for cues that could influence the trajectory of Ger 40 Futures.
Technical
The Ger 40 Futures encountered a challenging start in 2024, succumbing to downward pressures that originated from a reversal at the 17123 level, marked by overbought RSI conditions and the formation of a resistance level. This decline was substantiated as the price breached the 100-day moving average, confining itself within a descending channel pattern—a clear signal of a prevailing downtrend.
However, a noteworthy turnaround unfolded at the 16464 level, fuelled by a rebound propelled by oversold RSI conditions. This resurgence triggered a breakout from the descending channel pattern and a repositioning above the 100-day moving average. The significance of this upward shift was further underscored by a breakthrough above the 61.80% Fibonacci Retracement Golden Ratio, validating the renewed optimism.
As the index futures hover in this newfound positive territory, the potential retest of the 17123 level becomes plausible if bullish momentum endures. Conversely, the Golden Ratio looms as a short-term point of interest to the downside, acting as a potential focal point should bears reassert their influence.
![](https://blog.trive.co.za/wp-content/uploads/2024/01/image-66-1024x464.jpeg)
Summary
The Ger 40 Futures showcase resilience, erasing a 3% YTD loss, propelled by a robust manufacturing PMI and global economic factors. A rebound at 16464, breaking the descending channel and surpassing the 61.80% Fibonacci Golden Ratio, signals renewed optimism. The 17123 level retest is plausible with sustained bullish momentum, while the Golden Ratio acts as a short-term downside focal point.
Sources: S&P Global, 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.