Release of flash PMIs for June from France and Germany turned out to be a disappointment. French data showed a slump in service gauge from 52.0 to 48.0, meaning that the sector was contracting. Meanwhile, German data showed a plunge in the manufacturing index from 43.2 to 41.0 - the lowest level since May 2020 when sentiment in the industry was slumping amid Covid-19 pandemic and resulting lockdowns. While DE30 saw a positive reaction to French data and moved slightly higher, the index took a hit following release of German data as it hinted at continued struggles of the German economy's main motor - manufacturing.
Taking a look at the DE30 chart at the H4 interval, we can see that the index is currently trading near a psychological 16,000 pts level. A point to note is that the index plunged back into the recently broken 15,810-16,085 trading range. Nevertheless, the ongoing pullback has not yet exceeded the range of the correction that occurred in the second half of May 2023 and, according to the Overbalance methodology, remains in an uptrend. Should declines deepen traders should watch the 15,850 pts area, where the lower limit of the Overbalance structure can be found.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
Source: xStation5
