DAX, Euro Stoxx 50 Outlook: Upside Potentially Capped
DAX, Euro Stoxx 50 Price Analysis & News
- DAX | Upside Capped
- Euro Stoxx 50 |Tight Range Holds
- German Constitutional Court Raises Questions over ECB QE
DAX | Upside Capped
Yesterday’s ruling by the German Constitutional Court raises questions over ECB’s QE policy going forward (full analysis) creating further uncertainty over the lack of cohesion during the current crisis. In light of yesterday’s decision, risks are for a cap in the recent upside for the DAX, which has struggled to overcome the 50% retracement at 10,900. In the short-term, we look to the 50DMA situated at 10,586 for support. Failure to hold opens the door towards 10,200.
DAX Price Chart: Daily Time Frame
Source: IG Charts
Euro Stoxx 50 |Tight Range Holds
Much like the DAX, the Euro Stoxx 50 has had a somewhat muted session thus far with the index trading in a relatively tight range. As we have noted previously, the Euro Stoxx is not out of the woods yet until the index shows a decisive break above topside resistance at 2990-3000. That said, for confirmation of a near-term top in the corrective rally, a closing break below the 23.6% Fibonacci retracement would be needed.
Euro Stoxx 50 Price Chart: Daily Time Frame
--- Written by Justin McQueen, Market Analyst
Follow Justin on Twitter @JMcQueenFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.