GER30 sets up to tackle overhead resistance again

GER30 Overhead Resistance

- FXCM's GER30 CFD has substantial overhead resistance (red shaded horizontal) around the 16,300-16,400 levels.
- This infers a price or value at which up movements are arrested due to selling pressure overcoming buying pressure.
- It has hit this level four times since mid-November 2021 (green vertical lines).
- Since then, it has been repelled all four times.
- It is attempting to challenge this resistance again in the near-term.
- There is a danger that the stale bulls overwhelm buyers again as they scramble to exit their positions.

Weekly Analysis

- The GER30 is above its black 30-week EMA and the EMA is turned up. This is bullish.
- The weekly RSI is above 50 (blue rectangle), which is the bullish side of the indicator, denoting a positive underlying momentum.
- The longer it maintains above 50, the greater the likelihood that the overhead resistance (red dashed line) will be overcome.
- We are looking for a bullish reference candle reversal.
- The red candle that has the lowest low in at least three candles is the reference (blue arrow).
- If price closes above the reference candle's high (green solid horizontal), it will be regarded as a bullish development i.e., a bullish reference candle will have charted.
- This does not guarantee a bullish swing, but all swings start with this signal.
- As such, it should take the GER30 towards resistance, if charted.
- This is a weekly analysis, therefore the signal will rely on weekly price action.