Germany 30 technical analysis: Correction could reach 12,500
Germany 30 technical analysis shows that the index could come under heavy technical selling pressure if price trades under the 13,300 level. A breakout rally above 13,600 level appears to have been delayed for now.
The Germany 30 has recently pulled back from an all-time price high, as fears over the spread of the coronavirus send European and global equity markets lower.
Germany 30 technical analysis shows the index is vulnerable to a stronger technical pullback while price trades below the 13,300 level.
Germany 30 medium-term price trend
Germany 30 technical analysis shows that the index has recently pulled back sharply from the 13,600 level, as bulls failed to ignite a large reversal pattern.
It is noteworthy that the index managed to hit a new all-time price high, however, fears over the coronavirus prompted traders to decrease bullish bets towards the German DAX.
From a fundamental perspective the Germany 30 is vulnerable to further declines, as a drop-off in demand from Chinese consumers could hit the German economy particularly hard.
From a technical perspective, the daily time frame is signalling that a stronger downward correction is possible while price trades below the 13,300 level.
The index’s 50-day moving average is currently located around the 13,300 level, while key trendline support is located around the 13,000 level.
Watch out for weakness below the 13,300 level to accelerate technical selling towards the Germany 30 index.
Germany 30 short-term price trend
Germany 30 technical analysis shows that the index is only bullish over the short-term while trading above the 13,340 level.
Despite the recent sharp reversal from the 13,600 level the four-hour time frame is still showing that price is making bullish higher highs and lower lows.
At this stage, a drop below the 12,970 level is needed to change the current bullish short-term dynamics behind the Germany 30.
A decline below the 12,970 level would also help to create a large bearish reversal pattern across the four-hour time frame.
Should this bearish scenario occur, the size of the potential head and shoulders pattern indicates that the Germany 30 could decline towards the 12,400 area.
Watch out for the 13,340 level to act as a key trading pivot in the short-term.
Germany 30 technical summary
Germany 30 analysis shows that the index has recently started to pullback after hitting a new all-time high. Bearish pressure will increase if sellers can gain traction below the 13,300 support level.