Tuesday, October 8, 2019



Fundamental Highlights

European equities traded higher across the board on Monday as positive updates on the Brexit front and provided upside support. The German-blue-chip index rose by 0.70% and disregarded weakness in factory orders data. Today the nation’s industrial production figure for August recovered from contraction as it rose by 0.3% however is unlikely to have much of an impact as geopolitical headlines continue to prove to be the main market driver. Market participants should continue monitoring trade headlines ahead of the scheduled US-China trade talks on Thursday and Brexit updates , as they would determine market sentiment and lead direction on the DAX.

Technical Analysis

The DAX extended gains by 84 points to end at 12097 on Monday. The price managed to hold above the 20-period MA and continued to edge higher as it is seen forming a sequence of higher lows since reaching the low of 11823 earlier this month. It reached the resistance near 12150 and futures are currently attempting to trade above that level where resistance may be found at the 50-period MA near the 12165 level. Above this level we would see the DAX target the resistance zone of 12220/12250. We may see the DAX stall the higher moves today and trade lower to add to its sequence of higher lows. Look for a sustained move below 12080 to indicate selling pressure and target the 12000 support level. A breach of the previous low at 11969 would break the mentioned sequence and target lower support levels.

Support: 12000/11969
Resistance: 12165 /12220

Chart (H4)