Monday, September 16, 2019



Fundamental Highlights

The DAX marked its 8th consecutive gain on Friday as it rose by 0.47% amidst easing US-China trade tensions. President Trump expressed a consideration for reaching an interim trade deal with China which was reported to exempt further US products from tariffs. The news improved market sentiment towards the trade situation while economic stimulus from the ECB buoyed the German blue-chip index. Moreover, Economic data was in favor of the higher moves as the Eurozone’s trade surplus widened to 24.8 billion. Today, a change of sentiment may drag global markets lower as geopolitical tensions heighten following weekend reports of attacks on Saudi oil fields. In terms of data, there are no major economic releases out of the Eurozone, however China reported disappointing industrial production data which may add to the risk-off mood. Look to geopolitical and trade headlines to influence sentiment and price action on the DAX which may end its positive streak of gains today.

Technical Analysis

The DAX added 58 points to end at 12468 on Friday. The index edged above its previous high at 12477 to record an intra-day high of 12499. Today however, we may see the index fall as geopolitical tensions drove dax futures below the 20-period MA currently around 12400. Failure to trade above the 12400 level would maintain selling pressure and lead to a test of the support at 12300. Below 12300, the DAX should see further weakness and target the lower support levels at 12250 and 12200. On the other hand, trading above the previous closing price would be required to indicate buying pressure while a break above the resistance zone of 12500/12520 is required to enable further gains towards the resistance at 12600.

Support: 12300/12250
Resistance: 12520 /12600

Chart (H4)