The German economy, once seen as the economic engine of Europe, has recently faced a series of challenges. Uncertainties hampering growth include rising energy costs, ongoing supply chain problems and the ongoing spread of the Omicron variant of COVID.
Nevertheless, Germany's declined in December, albeit stepwise to 5.2% from 5.3% in the previous month. Nevertheless, that's an impressive feat given tightened coronavirus restrictions amid a new pandemic wave.
In addition, figures, also released yesterday, delivered surprisingly positive data and reached a record year. However, an additional challenge could already arise, specifically for Germany.
What has made the country's economy so successful so far is its local focus on industrial engineering and manufacturing. But might it be time for Germany to join the tech revolution, something China has focused on?
Tesla (NASDAQ:) for example has dominated the auto industry, overtaking many of Germany's once vaunted automakers. In addition, the pandemic has rocked Germany from its position with the world's largest surplus.
Could it be that recent economic releases showing relative strength eventually represent a peak, before a dip, when risks along with health constraints finally catch up with the data?
It is difficult to say if and when all these changes will become apparent through market activity. Still, the main German stock index, the , which outperformed the pan-European benchmark in 2020, underperformed the pan-European benchmark in 2021. year.
The technical data of the index also points to a possible delay.
The DAX finds resistance to its all-time high in November.
While the price has reached new highs, it is also churning and forming a rising wedge. The hypothesized dynamic of this pattern is that bulls get tired of pushing higher, while still not being able to reproduce the same results as before the pattern was formed.
Also note that both the MACD and the RSI have caused negative deviations from the price increase, possibly indicating a reversal. wait for a breakout to determine the next trend. They waited a minimum of 3 days and a 3% move to filter out any fake services, then waited for a return move to retest the integrity of the cartridge.
Average traders should do the same, but would be happy with a two-day filter of 2%.
Aggressive traders could benefit from a rare risk-reward ratio if bulls bump into November resistance.
Trade example
Input: 16,300
Stop Loss, 16,400
Risk: 100 points
Target: 16,000
Reward: 300 points
Risk Reward Ratio: 1:3
