Date: 12 Jun 2019

On Tuesday the DAX reflected the good results from the USA. Due to a public holiday, the German benchmark index started the trading week late. Both the resolution of the US trade dispute with Mexico, where many large German car manufacturers are producing and the Fed’s announcement that it was considering lowering interest rates boosted the buying intentions of many investors.

Chart-wise, the index was thus able to work its way almost to the bottom of an upward channel. The market had already left this channel at the end of May to test the support zone at 11.625 points.

After that, the market crossed the zone at 11.930 points to move towards the channel again. The interesting question now is whether the market will penetrate the channel or bounce off its lower edge.

The sentiment is slightly negative. For the first time since 2010, the analyst firm Sentix has recorded a negative value for its overall market index for Germany. This could aggravate the probability of a recession.

On the chart’s technical side, the MACD oscillator showed a bullish crossing due to the upward movement of the last few days. The two MACDs are traded below their zero lines, so the signal has not yet been confirmed.

Initial resistance on the way up could become the lower edge of the upward channel line for the market. Should the market move back into the channel, a resistance area in the zone around 12.420 points could result. Further resistance areas could be at 12.550, 12.800, 12.950 and 13.150 points.

If the market falls, the area around 11.930 points could be crucial. If the market cannot defend this threshold, further support could wait in the zones of 11.625, 11.360 and 11.105 points.

 

Ger 30 Daily Chart ActivTrader

Ger 30 Daily Chart | Source: ActivTrader

 

Written by Daniel Schuetz, External Analyst, ActivTrades

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