The German market is approaching the end of August in a noticeably stronger position.
On the GER40 chart, the price, after reversing from the 25,900 area, formed a sequence of rising lows and returned higher26 400.
The index is currently trading around26 500, and the nearest resistance is in the area26 515–26 570.
Main question:
Will GER40 be able to renew all-time highs or will the market need a correction first?
Germany unexpectedly accelerates
The fundamental backdrop for German stocks has improved in recent weeks.
Germany's GDP grew by0,3%, exceeding the initial estimate of 0.2%. The economy has been growing for the third quarter in a row.
Another positive signal is the business climate indexIfoin August rose to88.8 points, maximum for the year. The indicator has been growing for the fourth month in a row.
This is important for the GER40 as improving business expectations support the earnings outlook of large German companies.
GER40 on August 28, 2026. The main zones of possible purchase are marked at the levels of 26,236, 26,174 and 26,111.
Where to shop
From a technical point of view, the closest area of interest remains26 236.
If the correction turns out to be deeper, the following levels will be:
26 174
26 111
It is these zones on the chart that are marked as potential areas for searching for purchases when forming a price reaction.
While support is maintained, the main scenario remains upward with the goal of returning to26 500–26 570and a possible renewal of the historical maximum.
But there is a problem - the ECB
The main risk for European equities right now is inflation and interest rates.
The ECB maintained rates in July, but the minutes showed that some policymakers were allowing a new increase as early as September due to inflationary pressures.
An additional factor is that the 10-year German Bund yield has risen to around3,28%, the highest level in 15 years. Higher bond yields increase the cost of capital and can limit stock valuations.
Therefore, an interesting situation is now emerging for the GER40:
economy improves → positive for stocks;
inflation and yields are rising → risk for stocks.
Main conclusion
GER40 maintains a bullish structure and Germany's fundamental picture is gradually improving.
While the price is higher26 236, the advantage remains on the side of the buyers.
Deeper correction to26 174–26 111can provide even more interesting levels for searching for purchases.
But a breakdown of these zones downwards will force us to reconsider the short-term scenario.
