Tuesday, September 24, 2019



Fundamental Highlights

European Indices traded lower on Monday as disappointing PMI figures out of Europe raises concerns over the global economic outlook. The German blue-chip index declined by 1.01% as the nation’s manufacturing PMI figure fell to 41.4, its lowest level in 10 years. While it is well established that the Eurozone is suffering from an economic downturn, the figures intensified fears of a recession in the region and overshadowed policy supported provided by the ECB last week. Today, Germany publishes business sentiment figures which will be a test to further weakness in the DAX. Apart from the data, market participants should continue monitoring trade and geopolitical headlines as they dominate markets’ agenda of concerns.

Technical Analysis

The DAX suffered a loss of 125 points to end at 12342 on Monday. Weak economic data prompted a brief drop below the support level of 12300 before price managed to edge back above this level. The 12300 level represented the support level that contained the DAX’s range-bound movement over the last two weeks. Given that it has been breached, it is likely that we see the DAX take direction downwards. Look for a sustained move below 12300 to lead price to the support levels at 12250 and 12200 near the 20-day MA. On the other hand, holding above 12300 would maintain the DAX’s range-bound price action. Meanwhile, the 50-period MA near 12400 is acting as dynamic resistance on the DAX and a sustained move above this level is required to target the higher resistance levels at 12460 and 12500.

Support: 12300/12200
Resistance: 12400 /12500

Chart (H4)