Wednesday, October 3, 2018

DAX30 - 04 October 2018


Fundamental Highlights

Some positive news out of Italy, on reports that that the government will reduce its budget deficit targets for 2020 and 2021 to 2.2% and 2% respectively, however will stick with its plan of 2.4% for 2019 which remains a very crucial problem for the EU and its future fiscal policy. On the back of this pledge, spreads between Italian and German 10 year government bonds pulled back from their 5 year highs. In economic news, Germany Composite and Services PMI for the month of September came out higher than the previous month but missed expectations at 55.9 and 55 respectively. Year-on-year Eurozone retail sales figures for the month of August exceeded expectations by 0.1% at 1.8% vs. a previous of 1%. Today, release of Germany construction PMI (Sep) at 7:30 GMT with ECB’s Coeure speaking at 17:00 GMT.

Technical Analysis

The DAX bounced off the support level at 12208.5 and formed a lower high on the hourly chart, confirming the downtrend. Market is currently wedged between the 200 period SMA from below and the 20 and 50 period SMA from above with a cross bound to occur soon. A reversal bar candlestick formed at the touch of the downtrend indicating further bearish momentum if price remains below the downtrend and doesn't print higher than 12297.4

Support: 12208.5 12172.7 12126.9 12049.5
Resistance:.12344.9 12407.4 12459.6

Chart (H1)