Morning traders. After a quiet day on the market yesterday, we have another thin calendar in terms of economic data releases today.
ECB President Lagarde will participate in a virtual session answering questions posted on social media (09:30 CEST), otherwise, we will look out for Covid-19 data, the reopening of the advanced economies, increasing US-China tensions and rising Brexit risks ahead of the fourth negotiation round beginning on 1 June.
Comments from Federal Reserve Governor Bullard were optimistic over the recovery of the US economy and the outlook for the US labour market. He expects a solid recovery in Q3 and that unemployment will decline to some 10% as the economy reopens. Of course they were optimistic, because being honest would damage the national ‘denial’ of there being a huge issue bubbling under the surface. If you need a clue as to whether a larger economic issue is developing, just look at house prices. In fact, take a look at Ivan’s video: https://www.youtube.com/watch?v=GkIuiwlaOtU
In an interview with the Financial Times released this morning, the ECB’s Schnabel stated that the ECB is ready to act and use any instrument “if it judges that the medium-term inflation outlook has worsened”. We are ready to react to new data coming in”. Hence, this is another comment similar to the French Central Governor’s made earlier this week, that the ECB will act if needed. Perhaps the ECB will increase the PEPP at next week’s ECB meeting.
DAX 30 Review From Last Session
During the last session, we saw the DAX 30 tag a session high of 11546 and a session low of 11359 giving us a range of 187 points compared to the average daily range of 258. At the close of play yesterday, we closed at 11454 which was 261 points below the 200EMA and 567 points above the 50EMA.
Where Is The DAX Heading?
The German stock market index is currently Bearish, showing a progressive series of lower lows and lower highs. The trend defining level is currently 12755, so the market remains bearish below that level. In order for the market to remain bearish, we need to take out 12356. I will be looking to use the DAX trading strategy to provide some useful setups today.
DAX Key Levels
Moving on to the key levels to watch today, watch out for the previous session Point of Control (POC) at 11505. Today’s initial balance is between 11512 and 11581, so watch for a momentum break of either of those two levels. The value area high is currently 11533 and the value area low is currently 11475.Here are some more levels to watch out for:
- The 5 EMA (Daily): 11359
- The 8 EMA (Daily): 11239
- The 50 EMA (Daily): 10887
- The 200 EMA (Daily): 11715
DAX Technical Indicators
| Indicator | Value |
|---|---|
| RSI | 68 |
| Stochastic | K: 97 and D: 96 |
| MACD OSMA | 73 |
| Point of Control (POC) | 11505 |
| Value Area High (VAH) | 11533 |
| Value Area Low (VAL) | 11475 |
| The DAX Pivot | 11453 |
| The DAX R2 | 11640 |
| The DAX S2 | 11265 |
DAX Trading Strategy
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.
Sign up for DAX trading signals and learn how to get access to the trading strategy for yourself. Getting a signal is great, but learning how to trade the strategy is much better.
