Tuesday, June 18, 2019

DAX30 - 18 June 2019


Fundamental Highlights

The DAX declined by 0.09% on Monday as trade uncertainty surrounding the ongoing US-China trade impasse and potential tariffs on EU auto imports limit upside price action. On corporate news, The German airline Lufthansa issued a profit warning which sent shares sharply lower and in turn weighed on the DAX. Today Germany and the Eurozone both publish ZEW economic sentiment figures which should impact price action during the day as they reflect the region’s economic outlook. Moreover, the EU publishes inflation figures for May and trade balance data which should have less of an influence. Given that the DAX’s performance lies on the global outlook which has proven to be grim with the rise of geopolitical tensions in the Middle East and between the US and China, cautious sentiment should dominate markets and keep a hold on the bulls. Meanwhile, the highly anticipated FOMC meeting should keep global markets on the sidelines as they await tomorrow’s outcome.

Technical Analysis

The DAX failed to make upward progress as it declined by 11 points to end at 12085 on Monday. The price treaded below the 20-period MA acting as an indicator of near-term direction while the DAX remains within the range of the resistance at 12200 and the support at 12050. Look for a decline below 12050 to suggest a move below the 12000 level coinciding with 20-day MA and separating the index from negative territory and targeting the support at 11960. Meanwhile a trend line resistance on the RSI shows that price has drifted lower since reaching the high of 12225 in June. Look for a break above the RSI trend line and a sustained move above 12130 to indicate buying pressure and see the DAX attempt to re-test the resistance zone of 12200/12225.

Support: 12050/12000
Resistance: 12220/12250

Chart (H4)