Monday, September 23, 2019

DAX30

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Fundamental Highlights

The German blue-chip Index barely traded higher on Friday as it rose by 0.08%. The DAX managed to escape downside pressure that might have been brought about by news reporting that China cancelled planned visits to US farms that were a part of the most recent US-China trade-related meetings. As the trade situation continues to exhibit volatility on the account of the US and China’s ever-changing stances whilst remaining unpredictable, market reactions are expected to shift according to trade headlines. In terms of data, Eurozone consumer confidence figure showed a marginal advance yet remained in negative territory. Today, Germany and the Eurozone are to publish both manufacturing and services PMI figures which are expected to strongly impact price action. Apart from the data, given the DAX’s sensitivity to the global economic outlook, the main influence resides in trade and Brexit developments as any bad news could potentially undermine the support provided by the ECB’s economic stimulus.

Technical Analysis

The DAX advanced towards the resistance at 12500 on Friday before reversing gains to end with a marginal gain of 10 points at 12468. A decline below the 12400 level near the 50-period MA coupled with an RSI reading well below the 50 midline would be required to signal bearish pressure and target the lower support at 12300. Below 12300, we would see the DAX exit its range and neutral outlook as it would trend lower to meet the lower levels at 12250 and 12200. On the other hand, a break above the resistance zone of 12500/12520 would be required to signal a bullish continuation and target the higher resistance at 12600. It is worth noting that price has trended higher since finding support at 12300, therefore failure to hold above 12400 and break the resistance at 12500 would lessen the potential for further upside.

Support: 12400/12300
Resistance: 12520 /12600

Chart (H4)
DAX30