European economies slow

The German IFO Business Climate Index for Europe decreased marginally from 93.0 in May and 92.9 in consensus estimates to 92.3 in June.

The Current Economic Assessment also declined in the reporting month from May's 99.5 to 99.1 points, as was predicted.

Unexpectedly, the IFO Expectations Index, which measures businesses' estimates for the next six months, fell to 85.8 in June from 86.9 in May and 87.4 in market expectations.

Following the publication, institute economist Klaus Wohlrabe stated that despite elevated uncertainty, a recession is not now in progress. But the prospect of a gas shortage has made businesses more hesitant.

Double bottom?

It looks like a perfect double bottom pattern, with the support near February lows at 5,850 EUR. Thus, we might see some impulsive bullish momentum as long as that level holds. 

The resistance is expected at May's lows near 6,075 EUR, and if broken to the upside, a further rally toward 6,250 EUR could occur.

However, considering the recent problems in the global economy, any rallies are likely to be considered corrective pullbacks, with the long-term bearish trend possibly remaining intact.