Monday, August 12, 2019

DAX30 - 12 August 2019


Fundamental Highlights

The DAX erased gains from the previous session as it declined by 1.28% on Friday at the back of trade headlines and political chaos in Italy. President Trump’s remarks on Friday dimmed the chances that the two nations would meet next month and continued to weigh on sentiment. Separately on economic data, Germany’s trade balance for June came unchanged from the previous month at 18.1billion, while exports dropped by 8% YoY and reflected the impact of the US-China trade war on the economy’s manufacturing sector. Looking to the week ahead, GDP data from Germany and the Eurozone will be critical in assessing the region’s economic outlook amidst slowing global growth and the US-China trade war. With no major economic releases for the day, trade headlines and news on Italy’s political affairs should influence price action.

Technical Analysis

The DAX lost 151 points to end at 11693 on Friday. The price managed to hold above the 20-period MA however has yet to trade above the resistance at 11850 near the 50-period MA to target the resistance at 12000. The daily chart suggests the bearish development on the DAX may extend as the shorter 20-day MA crossed below the 50-day MA last week and is looking to cross below the 100-day MA to indicate a shift in the trend. For today, Look to the 20-period MA at 11730 to determine near-term direction on the DAX. Holding above 11730 would indicate buying pressure and should lead to a test of the 11850 resistance. Failure to hold above 11730 would lead price lower with a decline below the 200-day MA at 11650 required to indicate further losses.

Support: 11730/11650
Resistance: 11850 /12000

Chart (4H)