Sunday, October 14, 2018

DAX30 - 15 October 2018


Fundamental Highlights

The German Index ended slightly lower during Friday's session, failing to hold earlier gains and following on a bad losing streak last week. Concerns over higher US borrowing costs were the catalyst for last week's heavy sell off. However, there were plenty of other risk factors which were also dampening sentiment such as the US-Sino trade tensions, Brexit, Italy's budget proposal and now increased political tensions between the US and Saudi Arabia. Those risk factors are set to keep pressure on risk appetite this week. Today, German stocks are seen opening flat to slightly lower as worries about global trade and economic growth persist. Nothing in the economic calendar during the European session, however investors will most likely be watching for the US retail sales due later today.

Technical Analysis

From a technical standpoint the Dax is clearly attempting multiple times to bounce off from the important 11460 back to at least the 11895 resistance level as the RSI suggests oversold conditions on the hourly chart awaiting further confirmation on the 4H timeframe. However on the longer-term we remain in a bearish market and a break below the support level would signal a sharper drop all the way to the June lows at 10785.

Support: 11460 10785
Resistance: 11895 12185

Chart (H4)