The German 30 stock index futures has seen a shift in bias from positive to neutral over the past two weeks as prices have dropped from above the 200-day moving average to around the 50-day moving average. The index has rebounded somewhat from Friday’s lows but prices were capped today by the 38.2% Fibonacci retracement level of the April 2015 to the February 2016 downleg from 12404 to 8695.50.
The current upward momentum already appears to be waning with the RSI struggling to rise much past 50. Prices would need to break above the 38.2% Fibonacci level at around 10110 to gain a stronger upside momentum and the next resistance beyond that could come from the 200-day moving average at around 10200.
Failure to climb above the 200-day moving average would keep the neutral bias in check, while to the south, support would come from the 50-day moving average at around 9935. A drop below the 50-day moving average would threaten the neutral bias, especially if the index falls below the May 6 low of 9733.80.
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