Global macro overview for 19/12/2017

The Geramn Ifo Business Climate data dropped slightly to 117.2 points, while the market participants expected a reading of 117.6 points. The Ifo Expectations sub-index dropped as well form 111.0 to 109.5 points. Only Ifo Current Assesment increased slightly from 124.5 to 125.5 points. This kind of pull-back in sentiment is nothing new after the all-time highs being hit during the last months, but it may also suggest, that political deadlock in Europe's economic powerhouse is clouding the outlook.Chancellor Angela Merkel is struggling to form a stable government after her conservative party lost voters to the far right in September's election. So far her attempts to form a government in the form of a three-way alliance with two smaller parties failed last month. Nevertheless, the market participants still expect the German economic uptrend will continue in 2018 and those slides in mood are only a temporary.

Let's now take a look at German DAX index technical picture at the H4 time frame. The technical Head & Shoulders pattern is almost invalidated as the price has opened gap up again and hit the level of 13,336 before a drop. Currently, the price is trading above all of the moving averages, momentum look strong and it does not look like the bears have much to say. The nearest technical support is seen at the level of 13,108.


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