DE 30 Technical Analysis | DE 30 Trading: 2015-05-27 | IFCM
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DE 30 Technical Analysis - DE 30 Trading: 2015-05-27

Germany outruns eurozone countries, Grexit risk remains

Today we consider the German DAX 30 index CFD, nominated in the euros. In NetTradeX trading platform it is marked as DE30. On Wednesday concerns about the Greek default eased, so the index showed an increase. The government and creditors progressed in debt negotiations. To be noted, economic recovery in Eurozone almost graded up with Germnany due to the quantitative easing program by ECB. The estimated growth in German GDP was 1.1% in the first quarter, while eurozone GDP added 1%. However, Germany outruns other EU countries on a number of indicators. For example, in April the export surplus in Germany made €23.4bln, as compared to €19.3 bln in the whole eurozone. Thus, all other 18 countries account only for €4.1bln. Consequently, we do not rule out that DE30 may show better dynamics in the future than other European indices. Since the beginning of the year it has expanded 20%, falling behind French, Italian, Portuguese and some other indices.

PCI

On the daily chart DE30 has been in the uptrend. It has recently accomplished a pullback after showing ascending divergence, according to RSI-Bars. The chart is above the 200-day Moving Average. Parabolic gives buying signals. MACD bars are below the zero and signal lines, which indicates a bullish momentum as well. RSI has moved above 50. While having a positive slope, Bollinger Bands have started contracting, which may imply low volatility. It is worth mentioning that the risk of Grexit remains. This is an essential factor to be considered that is why it would be reasonable to place two or more opposite pending orders. If the fractal high is reached at 12058, a bullish movement may continue. If the price goes below Parabolic, the latest fractal and Bollinger line 11212, a bearish momentum will prevail. When one of the orders is activated, the other can be canceled, since the market has chosen the direction. After pending order activation, the stop loss is to be moved every four hours to the next fractal high (short position) or fractal low (long position), following Parabolic signals. The most careful traders can switch to the H4 time frame and place a stop loss, moving it after the trend. Thus, we are changing the probable profit/loss ratio to the breakeven point.

PositionSell
Sell stopbelow 11212
Stop lossabove 12058

PositionBuy
Buy stopabove 12058
Stop lossbelow 11212
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Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

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