Monday, July 22, 2019

DAX30 - 22 July 2019


Fundamental Highlights

The DAX ended the week on a bearish note but Friday on a positive note as it traded 0.26% higher. Support stemmed from the 50 point rate cut speculations triggered by Fed Williams’ speech which were later countered by a Fed spokesperson. In terms of data, German PPI dropped well below expectations for June thereby reinforcing markets’ dovish expectations from the ECB which is due for a monetary policy meeting later this week. On geopolitical news, Iran is reported to have seized a British oil tanker which may influence sentiment negatively during the day. Today, there are no major economic releases out of the Eurozone and price action on the DAX should be influenced by geopolitical and trade headlines.

Technical Analysis

The DAX fluctuated between gains and losses before ending 32 points higher at 12260 on Friday. The price reached resistance at 12335 before edging lower to maintain price action below the 20-period MA whilst managing to hold above the support at 12200. Look to the 20 and 50 period MA currently around 12290 and 12335 respectively to provide an area of resistance on the DAX’s short-term downtrend. Meanwhile, failure to hold above the 12200 level coinciding with the 50-day MA will lead the DAX towards the lower support at 12165. It is worthy to note that the daily RSI reading has formed a lower low while price has formed a higher low on the wider bullish trend. In the case that price action sustains above the 12200 level of support, it would confirm a bullish divergence and lead the DAX back up.

Support: 12200/12165
Resistance: 12290/12335

Chart (H4)