Friday, June 7, 2019

DAX30 - 07 June 2019


Fundamental Highlights

It was a mixed session for European Indices on Thursday with the DAX ending 0.23% lower. The Eurozone 3rd estimate GDP figure matched expectations, while German Factory orders increased by 0.3% in April. Economic data provided little direction as focus shifted to the ECB conference which expectedly left interest rates unchanged, however modified their forward guidance. The central bank stated it would extend its hold on interest rates to 2020 which took the Euro higher and weighed on the DAX as markets interpreted the guidance as not dovish enough. However, ECB President Draghi provided assurance, just as Fed Chairman Powell did, that the central bank would take measures to respond to further economic deterioration stemming from the current global trade disputes. Economic data should hold a stronger influence today as Germany publishes industrial production figure and trade balance report while the release of US Non-farm payroll data should also provide direction during the day.

Technical Analysis

The DAX traded lower to end at 11953 after price ranged between the resistance at 12080 and support at 11900. The index however managed to hold above the 20-period MA to maintain the rising trend. The 20-period MA currently at 11970 would determine near-term direction for the day as a sustained decline below the support zone of 11970/11950 would lead price towards the lower support zone at 11860/11840. Meanwhile, holding above 11970 should maintain buying pressure with a break above 12080 required to clear the way towards the resistance at 12150. Moreover, the 20-day MA resides at the 12000 mark which would ultimately determine whether the index is in positive territory should price sustain above that level.

Support: 11850/ 11700
Resistance: 12080/12150

Chart (H4)