The DAX traded 0.51% lower on Wednesday as it ignored Fed Chairman Powell’s dovish message in his two day testimony. He solidified market expectations of a rate cut as he blamed global trade uncertainty, tame inflation and slowing global growth for deteriorating the US’s economic outlook. Today, Powell delivers his 2nd day testimony which is unlikely to offer a different outlook however may influence price action in the DAX. Moreover on monetary policy, the ECB releases its monetary policy meeting minutes which should also influence the DAX as it guides monetary policy expectations.
The DAX extended losses on Wednesday as price found support at the 20-day MA around 12360 before ending at 12373. Look for a sustained move below 12450 to indicate selling pressure with a break through 12360 required to deepen the pullback and target a lower level of support at 12300. Alternately, a sustained move above 12450 would be required to target the resistance at 12500.