DAX30 bulls regain control – 13,000 soon?
Source: Economic Events October 26, 2020 - Admiral Markets' Forex Calendar
The German DAX made a weak impression last week on Thursday breaking below 12,500 points and going for an attack on the September lows at around 12,350 points, the last stop-over before the door opened down to 12,200 points, a region where we can also find the SMA(200) on a daily time-frame.
But, after testing the September lows, the DAX30 quickly reversed, pushed back to and above 12,500 points, establishing a potential bullish divergence on H1, pointing at least to diminishing bearish momentum.
The strong weekly close was mainly initiated after strong PMI's from Germany, but also the Euro-Zone in general with strong Manufacturing numbers:
- Germany: 58.0 against 55.0 estimated
- EZ: 54.4 against 53.0 estimated
But Service disappointed:
- Germany: 48.9 against 49.4 estimated
- EZ: 46.2 against 47.0 estimated
The German ifo Business Climate may point in a similar direction today, coming in better than expected. Market participants expect a dovish ECB on Thursday with a clear rhetoric towards an increase of the PEPP envelope from €1.35tn to €2.0tn at the December meeting. There are also signs suggesting a further cut of their deposit rate by the end of 2021. This could level the path up to 13,000 points in the days to come.
If bulls fail to sustainably recapture 12,700/730 points, the DAX faces the risk of another bearish stint down to 12,300/330 points and a test of the region around 12,200 points. Otherwise, a push back above 13,000 points in the days to come is a serious option:
Source: Admiral Markets MT5 with MT5SE Add-on DAX30 CFD Hourly chart (between October 05, 2020, to October 23, 2020). Accessed: October 23, 2020, at 10:00 PM GMT
Source: Admiral Markets MT5 with MT5SE Add-on DAX30 CFD Daily chart (between June 03, 2019, to October 23, 2020). Accessed: October 23, 2020, at 10:00 PM GMT. Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of the DAX30 CFD increased by 9.56%, in 2016, it increased by 6.87%, in 2017, it increased by 12.51%, in 2018, it fell by 18.26%, and in 2019, it increased by 26.44%, meaning that in five years, it was up by 34.2%.
Check out Admiral Markets' most competitive conditions on the DAX30 CFD and start trading on the DAX30 CFD with a low 0.8 point spread offering during the main Xetra trading hours.
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