27-06-2019 DAX Outlook

DAX Analysis Intraday

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Sliding Parallel Barely Holds On

This sliding parallel on the DAX hourly chart is barely holding price at the moment. The downside pressure builds after breaking to fresh intraday lows, but the market rejected lower prices.

German CPI expected at 1.6%

Consumer prices in Germany are expected to rise at an annual rate of 1.6% in June, according to a report published by the Federal Statistical Office (Destatis) on Thursday. Compared to the previous month, consumer prices are estimated to increase by 0.3%. Excluding the more volatile prices of energy and food, the index of goods prices is seen at 1.4% higher in June. Meanwhile, energy prices are estimated to rise at an annual rate of 2.2%, while food prices are expected to be 1.2% higher compared to June 2018. Meanwhile, the harmonized index of consumer prices, which is calculated for European purposes, is expected to add 1.3% annually and 0.1% month-on-month.

Eurozone Consumer Confidence: -7.2

Consumer confidence in the Eurozone was at -7.2 points in June according to a report released by the European Commission on Thursday. During the same month, consumer economic sentiment for the whole European Union marked a 0.7 point decrease, amounting to -6.9. The economic sentiment decreased 1.9 points to 103.3 in the euro area and 1.9 points to 102.3 in the whole union. The deterioration of sentiment resulted from lower confidence in industry, in services and among consumers, while confidence improved in retail trade and, particularly, construction. Meanwhile, the business climate indicator fell by 0.13 points to 0.17 as views on production expectations, as well as the overall and export order books and the level of stocks deteriorated, while the assessments of past production improved.

DAX Retraces Back To Value Area High

As I mentioned in the DAX technical analysis video this morning, price has retraced back to the value area high.

Poor Eurozone Business Climate Numbers

The Business Climate Indicator (BCI) for the euro area fell in June, compared to the previous month. The indicator based on monthly surveys stood at 0.17 points, which was an incredible 0.13 lower compared to the May reading. This may not sound like a lot, but check the economic calendar and see how much this has deteriorated over the past 18 months. Managers' production expectations, as well as their views on overall and export order books and the level of stocks deteriorated, while the assessments of past production improved.

Thursday

Morning traders. Yesterday we were busy on the trading signals and sent out seven forex trades (including markets like EURGBP, USDCAD, EURJPY, GBPUSD, GBPJPY and USDCHF) and seven index trades (including DAX and FTSE). Today we have already sent out three DAX signals and all of these signals are actual trades that we opened by following our trading strategy, which you can access by installing 'Sierra charts' and letting me know when you have it.

We've broken out above the yesterday high already this morning and we seem to be trying to break to fresh intraday highs.

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The Morning Briefing

DAX Starts Positively

The German DAX rose in premarket trade today ahead of the long-anticipated G20 summit this weekend. United States' President Donald Trump and his Chinese counterpart Xi Jinping are scheduled to meet in Osaka as the two countries continue their trade war. However, Chinese media reported Washington and Beijing have agreed to a tentative truce in the dispute ahead of the talks. Meanwhile on the data front, investors await inflation figures for Germany, as well as the European Commission's business climate survey of the Eurozone.

Iran Tension Update

Iran warned the United States against violating its borders again, vowing to retaliate with a "stronger reaction," next time. "The downing of their drone was a good experience for them to avoid any aggression against our borders," parliament speaker Ali Larijani said. "Iran’s reaction will be stronger if they repeat their mistake of violating our borders," he added. US President Donald Trump said he is not in a hurry to reach a deal with Tehran and pointed out he decided not to attack Iran after it downed an unmanned US drone in order to avoid casualties. Still, he refused to rule out a military confrontation with Iran but insisted any potential war would "not last long."

Boris Johnson Continues Strong Claims

Tory leadership candidate Boris Johnson said on Wednesday that he thinks the chances of a no-deal Brexit are "a million to one." The former London mayor who was also foreign secretary in Theresa May's government, added that he would not invite hard-line Brexiter Nigel Farage to take part in negotitations with the European Union if he became the next prime minister of the United Kingdom. Johnson noted that the Conservative party are "in crisis" and that four things must happen nevertheless: the UK must leave the EU on October 31; the country needs to be united and so does the Tory party; all parts of the country need faster broadband; and the Conservatives need to prepare to be strong enough to beat Jeremy Corbyn's Labour in case of a general election. However, Johnson pointed out he is against calling for an election in case parliament blocks a no-deal Brexit. The Tories will announce on July 23 if Johnson, or his opponent, incumbent Foreign Secretary Jeremy Hunt, will take over from Theresa May in Downing Street. The new prime minister will officially take the position on July 24.

What To Look Out For

DAX Key Levels