Thursday, September 26, 2019



Fundamental Highlights

European markets are down across the board on Wednesday with the DAX ending with a loss of 0.59%. Risks associated with political developments in UK and US weighed on market sentiment at a time when the global growth outlook is bleak and burdened by the prolonged US-China trade war. Today, Germany publishes its consumer climate index for September which is likely to have a muted impact as geopolitical news remains the dominant driver of price action and the main determinant of sentiment. Moreover, a slew of Fed members are scheduled to speak later in the day and the US publishes GDP, pending home sales and trade data which may impact direction on the DAX. On trade news, yesterday President Trump said that a trade deal might be reached sooner than expected contrasting the negative remarks he made earlier in the week and reflecting the volatility of the trade situation. Thus, market participants should continue monitoring trade headlines to influence price action.

Technical Analysis

The DAX extended losses by 72 points to end at 12234 on Wednesday. The price turned lower after meeting the 12300 level and broke below the support trend line from August 19th low to reach an intra-day low of 12142. Today, look for a sustained move below 12200 to indicate selling pressure with a break below 12142 required to lead the DAX to the lower support at 12080 followed by 12000. On the other hand, trading above the 12300 level would be required to indicate buying pressure and lead to a test of the dynamic resistance provided by the 50-period MA at 12360. The price is trending lower and so long as it holds below the 12400 resistance level, the downtrend persists.

Support: 12150/12080
Resistance: 12300 /12360

Chart (H4)