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Since the Germany 30 broke above the 10,000 level we have seen a couple of weeks of vertigo affect it, with the index dropping back down to the 9880 region. Considering the extended bull run that the market had been in this was no real surprise. However, global events have also played their part, as developments in Iraq have squeezed the oil price higher and caused equity markets to shift into a risk-off mentality.
As Chris Beauchamp pointed out, short-term stability has appeared with the 9827 intraday low from Friday offering a bit of support.
As much as investors will be keeping an eye on developments in the Middle East, Tuesday’s German ZEW economic sentiment figures are also likely to give the markets impetus. Last month’s German figures missed their mark and took German confidence back to levels last seen in January 2013.
The longer-term bullish trend still remains in place, but levels and the 50-day moving average look to be converging around the 9800 level which may offer some support.