Short-term technical outlook on Germany 30 Index (Thurs, 03 May)
Key technical elements
- After a 3-month choppy sideways movement since its 11900/800 major support in place since 06 Feb 2016, the Germany 30 Index (proxy for the DAX futures) has staged a strong up move yesterday, 02 May after a minor pull-back seen last week to print a low of 12311 on 25 Apr 2018.
- The daily RSI oscillator continues to inch higher above its 55% support and it has not reached an extreme overbought level of 85% that was last seen in early Nov 2017 before the Index hit an all-time high of 13600 on 23 Jan 2018. These observations suggest that medium-term upside momentum of price action remains intact.
- The index is now hovering right below the upper limit of the 12750/850 medium-term upside trigger level which is defined by the former range support from 15 Nov 2017/02 Jan 2018 and 61.8% Fibonacci retracement of the steep decline seen from its 23 Jan 2018 all-time high to 06 Feb 2018 low.
- The hourly Stochastic oscillator is now approaching an extreme overbought level of 98% which highlights the risk of a minor pull-back in price action at juncture after yesterday’s steep up move. The intermediate support to watch will be at 12700 (the 38.2% Fibonacci retracement of the steep up move from 01 May low to yesterday, 02 May high of 12829 & the former swing high of 05 Feb 2018).
- Key short-term support rests at 12620 (the former minor range resistance from 18 Apr to 02 May 2018 & close to the 23.6% Fibonacci retracement of the up move from 04 Apr low to 02 May 2018 high).
- The next significant short-term resistance stands at 13020 which is defined by the upper boundary of a minor ascending channel from 04 Apr 2018 low and the 1.618 Fibonacci projection of the up move from the minor swing low of 25 Apr 2018 to 30 Apr 2018 high projected from 01 May 2018 minor swing low of 12490
Key Levels (1 to 3 days)
Intermediate support: 12700
Pivot (key support): 12620
Resistances: 12850 & 13020
Next support: 12490
Therefore, as long as the 12620 key short-term pivotal support holds and a clear break above 12850 (an hourly close above it) is likely to see another round of potential impulsive upleg to target the next resistance at 13020 in the first step.
On the other hand, failure to hold at 12620 negates the bullish tone for a deeper pull-back to retest the 01 May 2018 minor swing low area of 12490.
Charts are from City Index Advantage TraderPro
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.