DAX Analysis

Good morning traders. During the last session, we saw the DAX 30 touch a session high of 12083 and a session low of 11852 giving us a range of 231 points compared to the average daily range of 251. At the close of play yesterday, we closed at 12080 which was 1054 points above the 200EMA and 1054 points above the 50EMA.

So the recent rally has driven the DAX to the highest levels since early March and futures signal more gains even still. We have a significant tailwind due to expectations more and more fiscal stimulus. So DAX traders are betting on a strong economic recovery, especially as Germany is an exporting country. And after the brilliant start in June, the Dax appears to show no signs of fatigue this morning. On Monday our DAX signals delivered some excellent numbers and our DAX trading strategy also delivered further profits. It was a double-digit growth day. But despite this, I prefer to exercise caution especially since we haven’t fully seen the dark side of the relationship between the United States and China, or the pandemic’s effect on the wider economy.

DAX Analysis 03-06-2020

Germany Outlook

Germany’s government will continue negotiations on the details of the new recovery stimulus package, after nine hours of talks yesterday did not result in any breakthrough. Ideas including debt relief for struggling local governments, cash bonuses to boost car sales and help for families with children are being discussed. The package could br an extra EUR100bn, which is on top of the EUR750bn coronavirus emergency package already deployed in March.

Economic Data

Watch out for PMI services indices for May. Chinese PMI, released this morning rebounded to the highest level since October 2010 and are now back in expansion territory. It seems we have some perceived positivity. Unemployment data for Germany (May) and the euro area (April) will also be released. The labour market is important for understanding the depth and duration of the current crisis. So far job losses in Europe are much more muted than the US. Today’s figures will show whether that has changed. The ADP jobs report for May is due out today too and it will probably show a big drop in employment in May.

Crisis in US

Trump’s decision whilst managing the civil unrest has not undermined the positive market reactions of recent weeks. It seems as governments and central bankers keep the stimulus tabs open, sentiment is positive. There is a risk that COVID-19 could spread among large groups of protesters, leading to a second wave of infections, watch that space.

DAX Analysis – Key Levels

Moving on to the key levels to watch today, watch out for the previous session Point of Control (POC) at 12010. Today’s initial balance is between 12135 and 12212, so watch for a momentum break of either of those two levels. The value area high is currently 12046 and the value area low is currently 11978.Here are some more levels to watch out for:

  • The 5 EMA (Daily): 11942
  • The 8 EMA (Daily): 11781
  • The 50 EMA (Daily): 11026
  • The 200 EMA (Daily): 11026

DAX Analysis – Technical Indicators

IndicatorValue
RSI86
StochasticK: 98 and D: 99
MACD OSMA99
Point of Control (POC)12010
Value Area High (VAH)12046
Value Area Low (VAL)11978
The DAX Pivot12005
The DAX R212237
The DAX S211773

DAX Trading Strategy

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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