- The ECB rate decision could rattle the German stock exchange
- Equivocal signals suggested by a weekly time frame
- DE30 remains above a 100% retracement which could prop up further rises
The German DE30 was hit last month by concerns related to companies’ financial results as well as the Catalan crisis. Nonetheless, bulls managed to halt the sell-off being additionally buoyed by revelations considering potential tax cuts in the US, as a result the German index marched above 13000 points. Looking ahead, the ECB meeting scheduled for this Thursday seems to be the most crucial event as far as the DE30 is concerned as some details on the future of the ongoing quantitative easing program might be expected.
The last week saw the first bearish close for more than 2 months, it wasn’t an unambiguous selling signal though. That said, once the price climbs above 13088 points, it could suggest a possible resumption of the underlying bullish trend. In turn 12830 points could be seen as an important support area while the 5-wave bullish scenario is still anticipated to unfold.
A spinning top formation seen on a weekly time frame suggests some fatigue of bulls. Source: xStation5
A daily RSI indicator remains above 70 points confirming a bullish trend, hence buyers could be aiming for their closest goal in the vicinity of a 127.2% retracement. In turn if this level is broken, a move towards an upper limit of a channel could be likely.
The DE30 still hovers above its highs marked in June. Source: xStation5
A H1 interval reveals that the last week’s pullback was halted after a 160 points slide which was the same size we saw at the end of August. That kind of a situation would suggest a continuation of increases with a light green rectangle being a support area.
Declines were stopped after a 160 points slide, a light green area should be seen as a support going forward. Source: xStation5