The Germany 30 index has climbed considerably since late March and after coming close to revisiting the 15-month low of 11,691.60 recorded in early February. Earlier on Monday, the index touched a three-month high of 12,889.50.
The Tenkan-sen and Kijun-sen lines are positively aligned, supporting the case for a bullish bias in the short term. The Chikou Span, though, may be hinting to an overbought market, the implication being that a pull-back in the near term is not to be ruled out.
Immediate resistance might be taking place around the 61.8% Fibonacci retracement level of the January 23 to February 6 down-leg at 12,868.78. This level itself was momentarily violated earlier in the day, but the area around it seems to be still acting as a barrier to the upside. Further above, additional resistance could come around the 13,000 handle, a level of potential psychological importance.
On the downside, support could come around the 50% Fibonacci mark at 12,645.24, with the region around it encapsulating other levels that may be of significance, such as the current level of the 100-day moving average (12,660.28), the Ichimoku cloud top (12,645.80) and the Tenkan-Sen (12,599.90). But before price action reaches the area around the 50% Fibonacci level, a couple of bottoms from the recent past at 12,810.00 and 12,739.80 might provide support as well.
The medium-term outlook has turned predominantly bullish after the index crossed above the 100-day MA (and consequently above the Ichimoku cloud). A drop back below this level though would set a more neutral medium-term picture.
Overall, both the short- and medium-term outlooks are looking mostly positive, though a signal for a possibly overextended rally in the short term is in place at the moment.
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