DAX Technical Analysis
DAX futures tumbled on Monday, falling and closing the day below the key support (now turned into resistance) zone of 9300 (R2). This was the first daily close below that hurdle since November 2014. The decline was halted by the 8900 (S1) support zone and during the European morning Tuesday, the index traded in a consolidative manner slightly above that barrier. The price structure on the 4-hour chart still suggests a short-term downtrend and therefore, I would expect a clear break below 8900 (S1) to see scope for extensions towards our next support zone of 8650 (S2), defined by the low of the 21st of October 2014. Our short-term oscillators detect accelerating downside speed and magnify the case for the index to continue trading lower. The RSI, already within its oversold territory, hit the 30 line and turned down, while the MACD stands below both its zero and trigger lines, and points south as well.
Support: 8900 (S1), 8650 (S2), 8360 (S3)
Resistance: 9100 (R1), 9300 (R2), 9600 (R3)
DAX Fundamental Overview
The dollar traded lower against most of its major counterparts during the European morning Tuesday. It was higher against JPY, SEK and EUR in that order, while it traded lower vs CAD, NZD, GBP, AUD and CHF. The greenback remained virtually unchanged against NOK.
The economic calendar continues to be relatively light, so participants keep their eyes on equities to gauge the market sentiment and adjust their trading strategies accordingly. European stocks have paused after yesterday’s tumble, spearheaded by Deutsche Bank. The DAX and the Stoxx 600 both traded relatively unchanged from their opening mark, while the FTSE is up 0.2% at the time of writing. So far, it appears that the European equities did not follow the plunge in Japanese stocks, but this by no means signals a reversal in the negative sentiment that has been dominating the markets since December. Safe havens gave back some of their overnight gains. Nevertheless, should risk appetite stays offered, we would expect further strength in these assets and we would treat this setback as providing renewed buying opportunities.