Guten Morgen, traders!
It’s Thursday, the session after Fed minutes and a key PPI print. The DAX is opening the day slightly soft after rejecting resistance again yesterday, as traders weigh inflation progress against tapering momentum. While global equities stay cautiously optimistic, the DAX is now at a decision point between continuation and breakdown.
Let’s break down what’s moving the market and the key technical landscape.
📉 Market Recap – Wednesday, May 21st
Wednesday’s DAX session began with a relief rally but quickly morphed into another test of resistance at 24,050–24,070. This level has now capped price for two sessions, triggering a sharp afternoon rejection.
🔑 Key Drivers:
- 🇩🇪 German PPI came in lower at -0.2% MoM vs -0.1% expected, reinforcing disinflationary pressures.
- 🇪🇺 ECB’s Schnabel maintained a cautious tone on rate cuts despite the inflation data, citing lingering service-sector price stickiness.
- 🇺🇸 Fed Minutes confirmed recent dovish hints but offered no timeline for rate adjustments—resulting in a muted U.S. market reaction.
🔻 Net Result:
The DAX closed near flat after swinging within a 230-point range. Bulls failed to break through resistance, and bears capitalized late in the session. This continues the recent pattern of strength fading intraday.
📅 Economic Calendar – Thursday, May 22nd
🕰️ Key Events:
- 🇩🇪 IFO Business Climate Index – 10:00 CET
Consensus: 90.5 (Prev: 89.4)
➤ An upside surprise could reignite risk appetite. Miss = sentiment fade. - 🇺🇸 Initial Jobless Claims – 14:30 CET
➤ Closely watched as a real-time pulse on U.S. labor conditions.
🧠 Macro Implication:
Markets are starting to demand “more than just disinflation” – sentiment needs actual growth catalysts. Without them, momentum could stall or retrace further.
📈 Technical Outlook – Thursday, May 22nd
📍 Chart 1: EMA Cross, RSI, Volume
- EMA Cross: The short-term EMAs (3/5/9) have turned downward post-rejection at 24,060. Bearish crossover visible.
- Volume: Selling volume surged into the U.S. close. Morning rebounds are lighter.
- RSI: Sits at 39.00, signaling loss of bullish momentum and near oversold territory.
➡️ Signal: Momentum is now bearish short-term. Watch for 23,900–23,880 as a hold zone.
📍 Chart 2: Bollinger Bands & ATR
- Bollinger Bands: Price rejected off the upper band (~24,046), pierced mid-line and is hugging the lower band.
- ATR: Rising again to 21.86 → confirms increasing intraday volatility.
➡️ Signal: Potential for volatility-driven breakdown unless support quickly absorbs price around 23,900.
📍 Chart 3: MACD & ADX
- MACD: Bearish crossover confirmed. Histogram shows deepening red momentum.
- ADX: At 28.47, indicating the trend strength is building for bears.
➡️ Signal: Trend is now favoring downside with strengthening momentum.
📍 Chart 4: Support & Resistance
- Resistance: 24,007 – firm ceiling from yesterday’s session.
- Support: 23,937 → being tested. Breakdown opens path to 23,880 and lower.
➡️ Signal: Holding 23,937 could create intraday bounce, but structure is weakening.
📍 Chart 5: 40 SMA (15 Shift)
- SMA: The price dipped and closed below the shifted 40 SMA (23,957), now pointing lower.
- Candle color: Turned bearish again, confirming shift in control.
➡️ Signal: Medium-term trend is turning down. Need reclaim of 23,960+ to negate.
📍 Chart 6: Peak Reaction Zones
- Upper Reaction Zone: 24,049–24,172 → continues to reject price.
- Lower Reaction Zone: 23,880 → double tap from previous sessions.
➡️ Signal: Key battleground. Lose 23,880 = capitulation risk. Hold = bounce potential.
📍 Chart 7: Daily Pivot Points
- Pivot: 23,997
- R1: 24,115
- S1: 23,868
- Current price: Below pivot and testing S1 range.
➡️ Signal: Below pivot bias is bearish. Hold above 23,868 = hope for base-building.
🎯 Trading Signal – Bearish Breakdown Setup
Setup: Sell on confirmed break below 23,870
- Entry: 23,865
- Stop: 24,005 (140 pts risk)
- Target: 23,445 (420 pts gain)
- Reward/Risk: 3:1
Rationale: MACD bearish, ADX rising, price under 40 SMA, and breakdown of key support zones in play.
🧩 Summary – What’s Driving the DAX Today?
✅ Bearish momentum confirmed by MACD, RSI, and volume
✅ Eurozone disinflation continues but lacks bullish catalysts
⚠️ Key supports are being tested. Bounce or breakdown?
🔍 Key Levels Today:
- Resistance: 24,007 → intraday cap
- Support: 23,880 → must hold
- Breakdown below = move toward 23,445
- Recovery above 23,997 could shift sentiment bullish
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