Piece written by Alexa Smith, Trive Financial Market Analyst  

The GER 40 Futures (EUREX: FDAX) are poised to conclude the week in the green after gapping up by 1.25% due to dovish notes from the European Central Bank (ECB). The ECB concluded its interest rate hike campaign after increasing rates by 25 basis points on Thursday, from 4.25% to 4.50%, as ECB President Christine Lagarde expressed her concerns about the European economy.  

Following the hike, the ECB expressed its intention to keep its key interest rates unchanged for an extended period, being of the belief that this approach would restore inflation levels to the desired target. Investor attention now pivots towards forthcoming central bank meetings scheduled for the following week, particularly those of the US Federal Reserve and the Bank of America, as they prepare to announce their respective rate decisions.  

Técnicos 

A bearish flag formed on the 4H Chart as the GER 40 Futures edged below the pattern’s lower boundary before establishing support at 15598. However, the 15598 support held firm and bolstered the index futures higher, rejecting a broader downtrend. The 50-day moving average edged above the 100-day moving average, which could support the occurrence of an uptrend as the ECB’s dovish tone encourages the index futures to gap up by 1.25%.  

Since the price action has cushioned at the 50% level, the 16174 resistance at the Golden Ratio could mark a pivot point for an uptrend. However, the Golden Ratio could hold and promote a leg down due to a sharp surge in overbought levels. In this case, the declining volume could sport a retracement towards the 15598 support.  

Resumen 

The GER 40 Futures gapped up due to dovish notes from the ECB. The ECB hiked rates on Thursday but decided to keep rates at the current level for the foreseeable future, encouraging the index futures to gap up as a result. Since the price action cushioned at the 50% level, the 16174 resistance could mark a point of interest for an uptrend. However, the Golden Ratio could hold and edge the index futures towards the 15598 support.  

Sources: TradingView, Reuters