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Ger30: Bearish divergence

The President of the European Central Bank, Mario Draghi, testified before the European Union’s committee of economic affairs yesterday afternoon. He reiterated that the euro zone recovery was losing momentum and said he expected inflation to remain at low levels, before rising in 2015 and 2016.

Today on the economic calendar we have from Germany the Markit Manufacturing PMI and the Markit Services PMI in September that are expected to drop, but should stay above the 50 level signaling economy expansion.

Ger30 initially Gaped down however broke higher during the course of yesterday session but the 9,800 level offered enough resistance to push the index back down, creating a potential evening star. The Index closed near the low but above the 10 day moving average and above the daily support zone at 9,716.

Expecting a downward move to daily key level at 9,590 on a break below daily support at 9,716 (scenario 1) or a break above the daily support at 9,800 could pull the price to Year high at 10,000 (scenario 2).

Ger30 is a CFD written over DAX30 futures.