Wednesday, September 25, 2019



Fundamental Highlights

The German Blue-chip index traded 0.29% lower on Tuesday amidst weak German business sentiment data and global political turmoil. In the UK, the Supreme Court ruled PM Johnson’s suspension of parliament as unlawful and leaves uncertainty lingering over Brexit ahead of the October 31st deadline. Meanwhile in the US, an announcement of an impeachment inquiry against President Trump weighed on sentiment and maintains the risk off mode. Today, Germany publishes consumer climate index which is likely to have a muted impact as geopolitics remains the key driving force of price action. Markets should continue monitoring trade and geopolitical headlines to determine market sentiment and price action on the DAX which is sensitive to the global economic outlook.

Technical Analysis

The DAX declined by 35 points to end at 12307 on Tuesday. The price tagged the resistance at 12400 near the 50-period MA before turning lower to breach the support at 12300 and find support near the 20-day MA at 12240. Today, look for a sustained move above 12300 to indicate buying pressure and lead price to form a lower high within the resistance zone bounded by the 20 and 50-period MA around 12360/12380 . This would confirm the minor downtrend unless we see price trade above the 12400 resistance zone. Meanwhile, a break below the confluence of support provided by the 12240 level and the trend line support from the August 15th low would signal further weakness and lead the DAX towards lower support levels at 12200 and 12150.

Support: 12200/12150
Resistance: 12300 /12360

Chart (H4)