Friday, May 24, 2019

DAX30 - 24 May 2019


Fundamental Highlights

European Indices traded lower on Thursday as pessimism over the US-China trade impasse weighed on risk appetite. Moreover, economic data failed to provide any relief as German Business sentiment figures decline alongside manufacturing PMI figures out of Germany and the Eurozone which remain in contraction territory. Moreover, the ECB’s monetary policy account revealed concerns over the region’s growth prospects against a backdrop of escalating Sino-US trade tensions and its negative implications on global growth. Today, there are no major economic releases out of the Eurozone to influence the DAX. Trade-related headlines will remain in focus and a driving force in the market as the outlook on global growth heavily relies on the global trade front.

Technical Analysis

The DAX declined by 1.78% to end at 11952 on Thursday. The daily chart shows that the DAX remains in a solid uptrend supported by a rising trend line from December’s lows. However, the formation of a lower high undermines the bullish outlook and raises the chances of a break below the trend line. Failure to surpass the lower high at the resistance of 12330 would maintain the short-term downtrend. Moreover, price has been supported by the 50-day Ma currently at 11950 and breaking and holding below that level would reinforce the bearish development on the DAX and re-test the support at 11850, which has held twice before, followed by the support at 11800. Look for a sustained move below the 12080 level coinciding with the 20-period MA to maintain selling pressure and drive the index towards lower levels.

Support: 11950/11850
Resistance: 12080 /12150

Chart (H4)