The DAX celebrated its 30th Birthday yesterday, but investors are not celebrating today. The trade conflict and German political crisis continue to cast shadows over the market. Perhaps we will see a hectic week to welcome the new week, month, quarter and half year.

02-07-2018 DAX TECHNICAL ANALYSIS – The German Crisis

The government crisis in Germany continues. Interior Minister Horst Seehofer (CSU) offers his resignation in the smoldering refugee dispute on Sunday evening. Today the peak meeting between CDU and CSU needs to bring an agreement. If there is no breakthrough here, then a breakup of the governing coalition is possible. 

Investors should look at how the asylum dispute continues. The compromise reached at the EU summit on Friday initially provided relief on the stock market but further issues remain. There is still hope that CDU and CSU can find an agreement on the refugee issue, but there is still daylight between them.

02-07-2018 DAX TECHNICAL ANALYSIS Summary

On Friday we saw a 32 point Gap (bullish) and a high of 12382 before closing at 12284 for a gain of 0.50% on the day. Despite this gain, the Dax closed the month of June over 900 points down. The gap lower this morning is also threatening the June low. During Q2 (April, May, June), we were unable to break the 13200 high. Therefore, a break below 11700 would signal a major bearish trend visible on the daily and weekly chart.

Watch out for the factory orders (Thursday) and industrial production numbers on Friday. More importantly, watch for developments in the CDU and CSU dispute. The question now is whether or not Dax can defend the 12000 level. 



02-07-2018 Dax TPO Chart

02-07-2018 DAX TECHNICAL ANALYSIS

02-07-2018 Dax 20m Chart

02-07-2018 DAX TECHNICAL ANALYSIS

02-07-2018 Dax 4m Chart

02-07-2018 DAX TECHNICAL ANALYSIS

02-07-2018 02-07-2018 DAX TECHNICAL ANALYSIS Key Levels

02-07-2018 DAX TECHNICAL ANALYSIS

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