Monday, August 19, 2019



Fundamental Highlights

The DAX traded 1.31% higher on Friday despite growing concerns over the health of the German and global economy amidst the ongoing US-China trade war. Over the weekend, news reports suggest there has been positive talks between the US and China which may improve sentiment for the time being. Given the negative outlook on the global economy, any upside potential on the DAX is limited and also unsustainable. Looking to the week ahead, the ECB meeting minutes will be a strong point of influence as market participants are seeking hints of monetary policy easing and stimulus measures. Today the Eurozone releases CPI data for July which is estimated to decline. This would further encourage monetary policy easing from the ECB and would be registered as a positive. Apart from the data, look to trade headlines to influence market sentiment and price action on the DAX.

Technical Analysis

The DAX gained 150 points to end at 11562 on Friday as it managed to rebound off of Thursday’s low of 11263. Dax futures are pointing higher this morning as price is trading above the 20-period MA and should find resistance at 11660 near the 200-day MA. From there we may see the DAX turn lower with a trade below the 11550 level required to indicate selling pressure and target the lower support at 11390. However, overcoming the 11660 level would enable further gains towards the 11750 level followed by the 11850 level which is separating the DAX from a bullish view.

Support: 11550/11490
Resistance: 11660 /11750

Chart (H4)