(Click to enlarge chart) What happened earlier/yesterday The Germany 30 Index (proxy for the DAX futures) has continued to drift lower towards the expected short-term […]
(Click to enlarge chart)
The Germany 30 Index (proxy for the DAX futures) has continued to drift lower towards the expected short-term downside target (support) at 10082 as it printed a low of 10160 (0.78% deviation from target) in the late European session.
Please click on this link to recap our previous daily short-term outlook/strategy.
Today’s key economic event will be the European Central Bank (ECB) monetary policy decision @1145 GMT and policy statement and press conference @1230GMT. The consensus is no changes in the key benchmark interest rates (Refinancing @0%, Deposit @-0.4% & Marginal Lending @0.25%) and no additional monetary stimulus. The full effects of the last easing measures announced in March have not yet materialise with corporate bonds purchases only to commence this month and further TLTRO allotments which suggests that ECB is likely to adopt a “wait and see approach” before announcing any new measures such as “helicopter money”.
In addition, the recent recovery seen in energy (crude oil) prices may be used by ECB as a reason to be more optimistic on Eurozone economic outlook as the risk of deflation diminishes which may act as a catalyst for a short-term rebound in the DAX.
Intermediate support: 10082
Pivot (key support): 9960
Resistance: 10285/320
Next support: 9970
The Index is now approaching the 10082 support (risk area) and also do recall that as per highlighted in our latest weekly technical outlook/strategy published on Monday, the Index may still undergo a potential residual push up towards the 10530/650 resistance (click here for details).
Current short-term technical elements are now advocating the risk of a rebound/recovery. As long as the 9960 daily short-term pivotal support holds, the Index is likely to shape a potential short-term recovery to target the 10285/320 resistance.
However, failure to hold above the 9960 short-term pivotal support is likely to invalidate the recovery scenario to see the continuation of the drop towards the 9970 minor range support.
Disclaimer
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
