Tuesday, October 1, 2019



Fundamental Highlights

The DAX traded 0.38% higher on Monday as market sentiment remained buoyed by the resumption of US-China trade talks next week while economic data provided support during the day. German unemployment fell by 10K in September while retail sales data recovered from a decline in the previous month. Today, Germany and the Eurozone publish manufacturing PMI figures both of which are estimated lower and expected to impact price action. In addition, the US publishes its ISM manufacturing PMI for September which may influence direction later in the day. Apart from the data, traders should monitor US-China trade developments as the DAX is most sensitive to global economic outlook which heavily depends on the trade situation.

Technical Analysis

The DAX extended gains by 47 points as it broke above the resistance at 12400 to end at 12428 on Monday. Dax futures are pointing higher this morning and looking to overcome the resistance at 12500 in order to target the higher level at 12600. Unless we see a break and sustained move above 12500, the price should range lower with a trade below 12400 required to indicate selling pressure and lead the index towards the lower support at 12350 near the 20-period MA. Below 12350, price would target the lower support at 12300. It is worth noting that the 4H RSI reading is trending higher alongside price and will eventually turn lower should it reach the overbought territory.

Support: 12400/12350
Resistance: 12500 /12600

Chart (H4)