Friday, September 13, 2019



Fundamental Highlights

European Indices traded higher on Thursday as the ECB met market expectations and cut its key interest rate and announced a bond buying program that was essential to stimulating the Eurozone’s slowing economy and driving prices higher. As a result, the DAX traded 0.41% higher on Thursday. Separately on economic data, Germany’s CPI figures pointed to tame inflation while the Eurozone’s industrial production declined by 0.4% however the data had a muted impact as markets awaited the ECB meeting. Today, the Eurozone publishes wages growth and trade balance data. Unless the figures are exceptionally disappointing, it is unlikely that the data would have a negative impact following yesterday’s ECB policy support. Moreover, the US releases retail sales data which may have an influence on the day. Apart from the data, traders should continue to monitor trade headlines as recent positive US-china developments can easily take a turn and reverse positive sentiment.

Technical Analysis

The DAX recorded its 7th consecutive gain on Thursday as it added 51 points to end at 12410. The price found support near 12300 before recording an intraday high of 12477. The RSI reading eased off the overbought territory yet remains on the bullish side. Failure to trade above yesterday’s high would result in range bound price action with a trade below 12200 required to signal a bearish phase. Look for price to trade and hold below the 20-period MA at 12360 to indicate selling pressure and lead the DAX to lower support levels at 12300 and 12200. Meanwhile, holding above 12400 sustains bullish pressure while trading above 12477 is required to target higher resistance levels at 12520 and 12600.

Support: 12360/12300
Resistance: 12477 /12520

Chart (H4)