Tuesday, July 2, 2019

DAX30 - 02 July 2019


Fundamental Highlights

European Indices posted sharp gains on Monday driven by renewed US-China trade negotiations and the halt of additional tariffs. The German blue chip index rallied by 0.99% as constituents found support on trade hopes and the removal of sanctions on Chinese telecom whilst shrugging off a rise in German unemployment and dismal manufacturing PMI figures out of the Eurozone, Germany and China. To add to the disappointing data, today Germany released its retail sales data for May which came below estimate and showed a decline from the previous month. Moreover, while US-China trade talks are reportedly underway, news that the US administration proposed the addition of tariffs on the EU should draw markets’ attention to another potential trade conflict. Thus, markets should monitor trade headlines as direction will be determined by news-driven sentiment.

Technical Analysis

The DAX reached a high of 12620 before trimming some of its gains to end at 12521 on Monday. The price was seen hugging the upper band validating the strength of the trend while today it is ranging above 12500 to suggest momentum is losing steam. The index may exhibit a turnaround in today’s session to meet the lower support at 12450 or the 20-period MA on the conditions that price declines below the 12500 level while the RSI reading exits the overbought territory. Alternately, a sustained move above 12500 would maintain buying pressure with a break above 12600 required to take the DAX towards higher resistance levels.

Support: 12500/12450
Resistance: 12600/12670

Chart (H4)