- If the DAX 30 breaches the lower limit of the range shown over the last few days at 9691, the DAX might reach the psychological level of 9500.
- Eurozone 4Q GDP is expected to rise by 1.5% YoY according to a Bloomberg News poll.
Traders may be on their way to give up on the DAX 30 (FXCM: GER30) as German Industrial production beat expectations this morning, but the DAX failed to gain and instead declined.
Industrial Production rose by 2.2% YoY from -2.2%, and thereby overtook the Bloomberg Poll projection of -1.6%.
If the DAX 30 breaches the lower limit of the last few days range at 9691, we may see lower prices and the DAX might reach the psychological level of 9500. Such a break may be used by traders that have a long term bearish outlook and therefore don’t be surprised if the downward trend of the last few months resumes.
Traders waiting for that stronger confirmation of a reversal taking place will stand on the side-lines today and will likely instead wait for a break to the January 27 high of 9931. On such a break, the DAX 30 may reach the January 13 high of 10,164 and this would also be in line with the bullish trend since mid-February. Please see the chart below.
Eurozone GDP for the fourth quarter is due at 10:00 GMT and expected to rise by 1.5% YoY according to a Bloomberg News poll. A stronger than expected reading would generally support the DAX, but as we saw with German industrial production this morning, this may not be the case, as bullish traders are nervous after a week with no gains.
U.S. NFIB Small Business Optimism Index is on deck this afternoon and a Bloomberg News Survey projects a rise to 94 from 93.9.
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DAX 30 | FXCM: GER30
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
— Written by Alejandro Zambrano, Market Analyst for DailyFX.com
Contact and follow Alejandro on Twitter: @AlexFX00
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