Thursday, August 1, 2019

DAX30 - 01 August 2019


Fundamental Highlights

Following a steep sell-off from the previous session, the DAX traded 0.34% higher on Wednesday. Economic data provided support during the day as the German unemployment rate held steady at 5% while unemployment increased by less than expected. From the Eurozone, the unemployment rate decreased to 7.5% while the YoY GDP figure showed the economy grew by 1.1% versus an estimate of 1.0%. Today, Manufacturing PMI figures out of Germany, the Eurozone and the US will hold strong influence on the day as they provide further insight into the global economic outlook. Alongside European corporate earnings should impact price action during the day and we may also see the DAX respond to yesterday’s interest rate cut and not so dovish message from the FED.

Technical Analysis

The DAX gained 41 points to end at 12189 on Wednesday. The price failed to move above the resistance coinciding with the 50-day MA at 12250 and dipped below the 100-day MA at 12090 to record an intraday low of 12044. Today we will look to the 20-period MA at 12250 to determine near-term direction on the DAX. It is worth noting there is a trend line resistance on the RSI which if broken could lead the DAX to trade above 12250 and target higher levels. In the case that it isn’t broken, the upside potential on the DAX is limited and the index remains vulnerable to downside pressure with a sustained move below 12090 required to target the psychological support level at 12000.

Support: 12090/12000
Resistance: 12250 /12300

Chart (H4)