Wednesday, October 9, 2019



Fundamental Highlights

The German blue-chip index traded 1.05% lower on Tuesday amid pessimism towards the US-China trade talks scheduled for tomorrow and Brexit’s outcome. The US blacklisted additional Chinese tech companies from doing business with the US and restricted visas to Chinese officials. The moves undermine the progress of the highly anticipated trade negotiations and leaves the possibility of a retaliation from China. In addition, the outlook for Brexit turns bleak as the UK stated that a deal may not be reached. Today, there are no major economic releases to impact direction on the DAX, and influence will be left to geopolitical news while markets should remain in risk-off mode.

Technical Analysis

The DAX put an end to its short-term rebound as it declined by 127 points to end at 11970 on Tuesday. Initially, the index traded higher however respected the resistance provided by the 50-period MA and turned lower to reach an intra-day low of 11914. Today, look for a sustained move below 11970 to indicate selling pressure while taking out yesterday’s low at 11914 would signal further weakness and target the lower levels at 11880 and 11820. On the other hand, we would have to see a sustained move above the 20-period MA around 12020 to indicate buying pressure and lead the DAX towards the resistance at 12080.

Support: 11914/11820
Resistance: 12080 /12140

Chart (H4)