- ECB supports of the ongoing rally seen across the European equity markets
- Will DE30 make a pullback even towards 12000 points?
- The nearest support seems to be placed ca. 160 points from the current price
The German stock market is realizing a bullish scenario following the ECB meeting which left rates unchanged meaning the deposit rate remained below 0%. The bank also vowed to keep loose monetary policy as long as needed in order to bring back inflation on an appropriate track. As a result, the European stock markets could benefit from this decision therefore one may assume that the DE30 could reach as much as 15000 points. Having said that, a technical point of view suggests caution as a larger pullback could be just around the corner. Let’s take a closer look at the charts.
Based on the chart below one could forecast that the DE30 may be placed at around the end of the third wave in a 5-wave sequence. Having assumed so we may predict that the index could head north up to 13500 points which stems from length of the first wave (notice that the Elliot wave theory suggests that the first and the fifth waves ought to be roughly the same). Thus once the forecast upside is reached, a deeper pullback could be on the cards even toward 12000 points.
Taking a look at a H4 interval we may also notice that the third wave (being a part of the bigger fifth wave) is building but some upside could be still left before a pullback could occur. The spot price is hovering around 13240 points which is underpinned by a 127.2% retracement. That said, a powerful impulse which emerged following the ECB meeting may push the price yet higher hence 13500 points could be on the cards.
At last the M15 time frame illustrates that the largest corrective move within the ongoing impulse was ca. 160 points, in turn the lesser pullback (ca. 40 points) has been already tested several times implying another possible move to the downside in the nearest future. The key technical supports stand at 13200 and 13080 points.