Wednesday, November 13, 2019



Fundamental Highlights

The German blue-chip index traded 0.65% higher on Tuesday as economic data provided support during the day. The German and Eurozone ZEW economic sentiment figures remained negative however showed a significant improvement. Today, the Eurozone publishes industrial production data for September which may have an impact on price action. Moreover, Fed Chairman Powell is scheduled to speak and traders will tune in for fresh clues on monetary policy. However, with trade news being at the forefront of markets’ concerns , it is likely we see limited price movement as President Trump’s speech yesterday reiterated that a provisional deal with China is imminent whilst renewing threats of additional tariffs. He failed to reassure markets and raise hopes of a trade deal which should leave traders in a cautious mode. The DAX is sensitive to trade developments which have showed no fundamental progress recently.

Technical Analysis

The DAX managed to erase losses from the previous two sessions as it closed 85 points higher at 13283. The price recorded an intra-day high at 13311 however has yet to show a sustained move above the resistance at 13300 to target the higher levels at 13430 and 13500 whilst bringing into view the 13600 all-time high. The daily RSI reading remains in the overbought territory while the 4H RSI reading has held above the 50 mid-line over the course this month. This indicates the DAX remains in bullish territory and until we see the daily RSI reading exit the overbought territory coupled with a break below the 13110 level, there is a good chance the DAX would extend its rally. Today, look for a sustained move above 13250 to indicate buying pressure and a trade below the support provided by the 50-period MA near 13170 to target lower levels.

Support: 13170/13110
Resistance: 13311 /13430

Chart (H4)