Tuesday, August 6, 2019

DAX30 - 06 August 2019


Fundamental Highlights

The DAX posted a decline of 1.80% to end at 11658 on Monday. Trade headlines set the tone for the day as China takes retaliatory measures against the US’s latest threat of additional tariffs. China decided to withdraw from purchasing agricultural products from the US and weakened its currency against the dollar to hurt US exporters. Separately on economic data, Services sector PMI figures from Germany and the Eurozone fell below estimates while the Eurozone composite PMI came in line with expectations. Today, Germany published factory orders which rose to 2.5%. The positive data should be overshadowed by weak sentiment towards US-China trade relations. The latest trade developments have inspired a risk off environment and a global bond rally as investors steer away from equities and buy into safer assets, thereby limiting upside potential on the DAX.

Technical Analysis

The DAX extended losses by 213 points on Monday. The price dipped below the 200-day MA at 11650 to record an intraday low of 11549. DAX futures are pointing lower this morning as price reached a low of 11445 from which it has turned higher since. We will look to the 11650 level near the 200-day MA to determine near-term direction on the DAX. A sustained move below this level would lead to a test of the support at 11445 followed by 11390. Alternately a sustained move above 11750 may lead the DAX to test resistance near the 20-period MA at 11880.

Support: 11550/11445
Resistance: 11750 /11880

Chart (H4)