The German blue-chip index showed limited price movement as the anticipated FED monetary policy meeting later today left markets in a wait and see mode. Because a rate cut is widely expected, markets will be interested in Fed Chairman Powell’s speech and looking for clues on looser monetary policy in the future. Elsewhere, UK lawmakers voted for a general election in December and leaves Brexit’s outcome uncertain. In terms of data, Germany publishes its unemployment rate and unemployment change for October which may have a mild impact during the day. Moreover the US releases ADP employment change and 3rd quarter GDP figures. Both will have an influence ahead of the Fed’s monetary policy meeting which is considered the high-level impact event of the day.
The DAX ended virtually flat on Tuesday as price edged lower to find support near the 20-period MA at 12890 before closing 2 points lower at 12939. The DAX hardly made any significant moves and has yet to exit the narrow range bounded by the support at 12890 and the resistance at 12960 to take direction. Look for a sustained move above 12960 to indicate buying pressure and potentially lead to a re-test of the high at 12988. Overcoming this high would clear the path towards higher levels at 13080, 13130 and 13200. Failure to take out this high would leave the DAX in consolidation mode until a decline below the support at 12890 targets lower levels at 12830 followed by 12750.
Resistance: 13000 /13130