22-01-2019 Dax Technical Analysis

22-01-2019 DAX

22-01-2019 Dax Technical Analysis

The DAX is driving in reverse today after disappointing Chinese economic data, trading around 11080 (70 points below yesterday’s close). There was no impetus from Wall Street yesterday meaning no action because of a holiday. So it’s a bitter-sweet situation; before the weekend we finally crack the much-watched 11,000 points mark thanks to new hopes for an end to the US-China trade dispute. But on yesterday it was announced that China’s economic growth in 2018 has fallen to its lowest level in nearly three decades.

Brexit and the tariff dispute between the US and China continue to be long-running topics. In the background, investors are waiting for the ZEW index result, which will perhaps provide some momentum. This reflects the mood of the German stock market professionals. Given the high price gains of the past week and the continuing high level of political uncertprofit-taking taking should not surprise anyone.

In addition, the stockbrokers hope for positive momentum from Wall Street, after the US stock exchanges were closed on Monday for a holiday. 

The earnings season is also in the next round: Johnson & Johnson and IBM open the books. 

The latest economic data from China lent the stock markets anything but a tailwind, said analyst James Hughes from broker Axitrader.  The same was true for statements by British Prime Minister Theresa May on the further Brexit strategy in front of the lower house in London.

22-01-2019 Dax Outlook

After such a strong rally on Friday, it was inevitable that a pullback/retracement would happen. 

The base of the move (point of ignition) was around the 11k mark. Considering this handle provided so much resistance, it would be reasonable to assume that the market would be looking to test that level from above. So that’s one option.

Another option is visible on the 10-minute chart below. This would involve a return to a previous high-volume area, around the 11010-11025 zone.

Positive ZEW could provide some bullish momentum and targets would include the point of control, perhaps a full gap close. 

22-01-2019 Dax Charts

Key Levels

  DAX FTSE DOW ESTOXX
Point of Control :  11141 6979 24613 3124
Value Area High :  11158 6983 24642 3127
Value Area Low :  11138 6968 24590 3123
VWAP :  11150 6974 24622 3125
R2 :  11244 7008 24759 3137
S2 :  11082 6941 24486 3117
Pivot :  11163 6975 24622 3127
Camarilla Breakout (Bull) 11196 6998 24709 3135
Camarilla Breakout (Bear) 11106 6961 24559 3124

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