4-hr Germany 40: Price Meets Important Resistance in Down Trend

Over the past week, the DAX has experienced a sharp decline, plunging by an astonishing 3,400 points. This downward movement is not isolated, as its international counterparts, such as the UK100 and US100, are also facing significant losses. This widespread market downturn suggests a prevailing risk-off sentiment among investors.

Given the current conditions, we anticipate a further decline of approximately 700 points. Our outlook is reinforced by the appearance of the "death cross," a well-known technical pattern signaling a bearish trend. Historically, this formation has been a reliable indicator of continued selling pressure.

To capitalize on this movement, we executed a sell trade at 22,490, a key level coinciding with the 38% Fibonacci retracement. This level has repeatedly acted as strong resistance in previous market cycles, making it a strategic entry point for our trade.

Considering the heightened market volatility, we have implemented a stop-loss (SL) with a 2% buffer from our entry price. This allows for some flexibility while mitigating excessive risk. By combining technical analysis with prudent risk management, we aim to navigate the ongoing bearish momentum effectively.