Friday, May 10, 2019

DAX30 - 10 May 2019


Fundamental Highlights

The DAX Index fell 1.69% to end at 11973 on Thursday. The sharp drop reflects the Dax’s high level of sensitivity towards world trade developments as US-China trade tensions escalate. The US will impose tariffs today and China intends to respond with unspecified countermeasures while markets await the outcome of the ongoing trade talks between the two nations. Moreover, Germany’s weak macro data resulted in the recent growth forecast cut to 0.5% and highlights the export nation’s trade balance data due today. However, the main focus remains on the unfolding of the US-China trade dispute which will continue to be a driving force for price action.

Technical Analysis

The DAX erased gains made on Wednesday as it fell below the 12000 level to end at 11973 on Thursday. Gains remain limited by the 20-period MA around 12130 acting as dynamic resistance as price falls down the lower Bollinger band. Look for a sustained move below 11980 to signal further declines with the next target support at the 50-day MA around 11850. The long-term outlook remains bullish so long as the pullback doesn’t extend below the support at 11800.

Support: 11980/11850
Resistance: 12130 /12180

Chart (H4)