Germany 40 breaks out with one important catchGermany 40 CFDFOREXCOM:GER40FOREXcomOur Germany 40 contract has broken to fresh record highs after clearing resistance at 25,923, extending the bull move that's been building since the rebound from 24,600. The breakout above 25,275 and subsequent backtest added conviction that buyers remained in control. The broader technical picture continues to favour upside. The price trades above rising key medium and long-term moving averages. RSI (14) is pushing higher at 66 without being overbought, while MACD has staged a bullish crossover and continues to strengthen in positive territory. The setup therefore favours bulls. I just don't see enough to justify chasing fresh record highs right now. For one, the last break to record highs earlier this year fizzled quickly. Secondly, the macro backdrop may prove just as important as the technicals when it comes to the breakout's longevity. Germany remains heavily reliant on imported energy, meaning the recent slide in crude oil prices on hopes of a lasting Middle East peace deal has provided a near-term tailwind. But whether it lasts, or simply proves to be another false dawn in this ongoing geopolitical saga, may determine whether this breakout sticks. Rather than buying fresh highs, I'd rather wait for a backtest of 25,923. If former resistance flips to support, it would provide far greater confidence that this is a genuine breakout to chase. Longs could then be established above 25,923 with a tight stop below, targeting higher levels. At record highs, trying to pick an upside target feels like guesswork. Instead, I'll be watching for reversal patterns on the daily timeframe, such as a bearish engulfing pattern, shooting star, evening star or key reversal, as an early warning that the bull move may be running out of steam. Good luck! DS