20-06-2019 DAX Outlook

The Daily DAX Thread

Bank of England leaves rates unchanged

No real surprises there.

Retail sales in the United Kingdom were 0.5% lower in May compared to the month before, the country's Office for National Statistics released.

Interesting news so far: Oil jumps over 2% after Iran downs US drone, Turkey sentences 24 to life over 2016 coup attempt, Dow rallies 240 points premarket on rate cut hopes. As for the DAX, well we had a couple of buy signals from the trading strategy earlier, so the image below

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The Morning Briefing

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Major European stock indexes were higher in premarket trade this morning after central banks in the United States and Japan left interest rates unchanged, but the US Federal Reserve pointed out that the case for further stimulus is growing, hinting to a rate cut in the near future.

Many participants now see the case for somewhat more accommodative policy has strengthened

Fed Chairman Jerome Powell said at a press conference following the policy statement. The Bank of England is set to leave rates unchanged today as well This is because key issues surrounding Brexit remain unresolved. Meanwhile, gold prices surged to their highest level since 2013 following the dovish tone struck by the Fed, while the yield on the US ten-year Treasury note slid to its lowest since 2016.

Economic Calendar

Watch out for the UK retail sales numbers, BoE MPC Interest Rate Decision, and US initial jobless claims numbers on the economic calendar today.

We found out today that producer prices in Germany increased by 1.9% in May compared to the same month a year ago, according to the country's national statistical office Destatis. In April, the producer price index was up 2.5%. The index saw an increase in prices in all main industry groups with energy contributing the most to the rise. In May, energy prices jumped 4.5% year on year with electricity soaring 9.2%. Excluding energy, the producer price index added 1.1% compared to the same month in 2018. Prices of non-durable consumer goods rose 1.8%, capital goods prices were up by 1.6%, durable consumer goods prices added 1.4%, while intermediate goods prices grew by 0.5%.

Where Will The DAX Go?

The DAX explodes out of the blocks this morning, mainly because of the central banks dovish stance. It's worth tidying up the charts a little bit, for example with my hourly chart to simplify things. We can quite clearly see that the blue markers are representing the swings. Let's use a pitchfork to give a bullish answer. You will need to watch the video to learn more about how to use pitchforks on the DAX.

I think the biggest risk to traders at the moment is the fear of missing out and buying the DAX high. However you can also build a case the other way around, that traders may miss out on this massive momentum if they do not buy now. Which side are you on?