There are no major market movers today on the calendar, so most traders will be watching for whether economies in Europe and the rest of the world will reopen. The main risk to restarting normality is the effect it will have on the infection numbers. Keep an eye on the increasing tensions between China and the US. Watch out for PMIs later in the week and we will also get both FOMC and ECB minutes as well.
US v China
The tensions rose again last week Friday and on the weekend as Peter Navarro accused China of hiding the virus. He continued to say that China ‘sent hundreds of thousands of Chinese on aircraft to Milan, New York and around the world to seed that’. This and the Huawei saga is a good indication that the tech war between the two countries continues. So even though the phase 1 deal is signed, these developments add to the already high degree of concern in the world economy.
UK v EU
On Friday, the third round of trade negotiations between the UK and the EU27 finished and, it looks like the negotiations are breaking down ahead of the important decision of a possible extension of the transition period, fishery and financial services before 1 July. Talks begin again on the 1st of June, but the expectation of no agreement is high.
Jerome Powell’s said in an interview recently that the (US) economy will recover steadily through the second half of this year, but has suggested there could be plenty of ‘ass-covering’ caveats. But of course, he would say that because if he says anything else it would just create panic. Let’s just keep an eye on the inflation numbers and whether or not another round of fiscal stimulus is announced. I’ve almost lost count of the current level of stimulus.
During the last session, we saw the DAX 30 get to a session high of 10548 and a session low of 10371 giving us a range of 177 points compared to the average daily range of 268. At the close of play yesterday, we closed at 10527 which was 1218 points below the 200EMA and 222 points below the 50EMA.
This morning we’ve already gapped above the previous session’s value area high and distribution high with a gain of over 200 points so far. Signals will be available on the member’s section
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DAX 30 Levels To Watch
As for the key levels to watch today, watch out for the previous session Point of Control (POC) at 10485. Today’s initial balance is between 10678 and 10740, so watch for a momentum break of either of those two levels. The value area high is currently 10504 and the value area low is currently 10426.Here are some more levels to watch out for:
- The 5 EMA (Daily): 10628
- The 8 EMA (Daily): 10637
- The 50 EMA (Daily): 10749
- The 200 EMA (Daily): 11745
DAX Technical Indicators
|Stochastic||K: 64 and D: 43|
|Point of Control (POC)||10485|
|Value Area High (VAH)||10504|
|Value Area Low (VAL)||10426|
|The DAX Pivot||10482|
|The DAX R2||10659|
|The DAX S2||10305|