Monday, February 4, 2019

DAX30 - 04 February 2019


Fundamental Highlights

The DAX closed virtually flat at 11180 on Friday. Though recent optimism surrounding US-China trade talks may be enough to buoy market sentiment, slowing world trade growth harbors negative implications for Germany’s economic dependence on exports. Moreover, Germany’s weak macro data, evident in declining sales and a contracted manufacturing sector, resulted in last week’s GDP forecast cut for 2019 by the Economic Ministry highlighting the nation’s economic slowdown. With that said, gains on the DAX will be limited by growing pressures on Germany, however trade developments continue to be a driving force for price action.

Technical Analysis

A short-term neutral bias is likely to keep the DAX index bounded by constricting Bollinger bands at 11130 and 11245 indicating low volatility and an impending breakout. While the index recently formed a higher low at 11045, suggesting the possibility of further upside, a move past resistance of 11325 is required to confirm buying pressure. Alternately, a break of the newly found support at 11045 will confirm selling pressure.

Support: 11130/ 11045
Resistance: 11245/ 11330

Chart (H4)