Good morning traders, it’s Monday the 24th of February and time for today’s German DAX 30 analysis. And the outlook is bleak. Coronavirus is now less of a market distraction and becoming more of a market contagion risk.
The fear of the economic consequences of the coronavirus epidemic pushed the German stock market deeply into the red on Monday. The corona virus is spreading more and more to Italy, the IMF is cutting its forecast for Chinese economic growth – Dax investors are taking cover for such news on Monday.
The International Monetary Fund has now lowered its growth forecast for China – a country of immense importance for global economic growth – because of the effects of lung disease. With regard to Germany, economists from leading German financial institutions now assume that the consequences of the virus crisis could delay an economic recovery
The first economic consequences are now becoming apparent through supply bottlenecks in some industries, Erik Nielsen, chief economist at the Italian Unicredit Bank, explained. This supply shock – and in some cases also the demand shock – hits a global economy that had already shown itself to be somewhat sluggish towards the end of 2019. In addition, central banks and governments can only react with stimuli to a limited extent, especially when supply shocks occur
DAX 30 Review From Last Session
During Friday’s session, we saw the DAX 30 reach a session high of 13700 and a session low of 13487 giving us a range of 213 points. When you compare that to the average daily range of 155, you can see we were 58 points above the average implying a slower session with less opportunity to use the DAX strategy. We can still get some decent signals from the DAX trading strategy, they are just lower probability.. On the whole, after considering the previous day’s price action, it’s evident we had a bearish session that ended up 137 points lower on the day.
DAX Outlook and Bias
The DAX30 index is currently Bearish, showing a progressive series of lower lows and lower highs. The trend defining level is currently 13720, so the market remains bearish below that level. In order for the market to remain bearish, we need to take out 13557. I will be looking to use the DAX trading strategy to provide some useful setups today.
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DAX 30 Levels To Watch
Moving on to the key levels to watch today, watch out for the previous session Point of Control (POC) at 13645. Today’s initial balance is between 13639 and 13718, so watch for a momentum break of either of those two levels. The value area high is currently 13691 and the value area low is currently 13544. Here are some more levels to watch out for:
- The 5 EMA (Daily): 13463
- The 8 EMA (Daily): 13511
- The 50 EMA (Daily): 13564
- The 200 EMA (Daily): 13173
- The Daily Pivot: 13578
- The Daily R2: 13791
- The Daily S2: 13365
The DAX trading strategy produced 1 trading signals of which 1 worked out well. Remember, you can get a copy of the DAX trading strategy for yourself. All you need to do is get Sierra Chart installed on your machine. If you need a reminder of how to do that, visit the dax trading strategy page.
To keep up with the economic calendar and the latest price action, click this link to open up the DAX chart.
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Performance so far for 2020 is just under 12.5% return and just over 2000 pips gained. Last week was challenging and I made a loss of -0.88% to the account. It could have been worse I suppose, but overall, forex performance is still good.