Thursday, September 12, 2019



Fundamental Highlights

The German blue-chip index rose by 0.74% on Wednesday as positive trade developments provide global markets support. China announced it would exempt certain US products from retaliatory tariffs and today’s news offers further semblance of easing tensions as President Trump announced he would delay tariffs on China. In the meantime, market participants await the ECB’s monetary policy decision while trade optimism buoys market sentiment. The ECB is expected to announce a rate cut as well as quantitative easing measures in efforts to stimulate the Eurozone’s slowing economy. Moreover, the Eurozone publishes industrial production data and Germany publishes CPI figures both of which are expected to have a muted impact as the ECB’s policy meeting result should be the main driver of price action. Fulfilling market expectations on monetary policy would be required to enable further advances on the DAX.

Technical Analysis

The DAX added 90 points to end at 12359 on Wednesday and could be on its way to recording its 7th consecutive gain should markets’ monetary policy expectations be met. The price has relentless climbed higher while the 20-period MA currently at 12300 provides dynamic support. Moreover, the RSI reading remains within the overbought territory as bullish momentum sustains, however should eventually turn lower and signal a short-term reversal on the index where a trend line support is provided from August’s low. Look for a sustained move above yesterday’s close to maintain buying pressure with a break above the resistance at 12455 required to drive the DAX towards the higher resistance levels at 12520 and 12600. On the other hand, a decline below 12300 would indicate selling pressure and lead the DAX towards the support at 12250 and 12200.

Support: 12300/12250
Resistance: 12450 /12520

Chart (H4)