HomeContributorsTechnical AnalysisGER 30 Index Possibly Oversold in Near-Term; Looking Bearish in Medium-Term

GER 30 Index Possibly Oversold in Near-Term; Looking Bearish in Medium-Term

The Germany 30 index has managed to cross above the 12,000 handle – a level that may be of psychological importance – after previously falling as low as 11,729.50 during Monday’s trading and coming close to the one-year low of 11,691.60 that was recorded in early February.

The bias in the short-term is looking bearish as indicated by the negatively aligned Tenkan- and Kijun-sen lines. The Chikou Span however might be pointing to an oversold market, rendering a rebound in the near-term a possibility.

Index advancing could meet resistance around the 23.6% Fibonacci mark of the January 23 to February 6 downleg at 12,141.06. The area around this barrier also includes the current level of the Tenkan-sen at 12,171.50, with an upside break bringing into view the 38.2% Fibonacci level at 12,418.18.

On the downside, support might come around 11,866.20, this being a previous low with the range around it encapsulating a few bottoms from further back in time as well. Steeper declines would shift the focus to the one-year low of 11,691.60 for additional support.

In terms of the medium-term picture, it is looking bearish at the moment: Price action is taking place below the 50- and 100-day moving average lines, as well as below the Ichimokou cloud. In addition, a bearish cross was recorded in mid-February when the 50-day MA moved below the 100-day one.

Overall, both the short- and medium-term outlooks are looking bearish, with the caveat that an overextended selloff might have taken place in the short-term, something which keeps the possibility for a near-term price recovery open.

XM is a fully regulated next-generation financial services provider of online trading on currency exchange, commodities, equity indices, precious metals and energies, with services to clients from over 196 countries worldwide. Founded in 2009 by market experts with extensive knowledge of the global forex and capital markets and with the aim to ensure fair and reliable trading conditions for every client, XM has reached international recognition by virtue of its unbeatable execution of orders, spreads as low as zero pips on over 50 currency pairs, gold and silver, flexible leverage up to 888:1, and personalized customer engagement to foster clients’ success.

Featured Analysis

Learn Forex Trading