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DAX 30 Is Primed To Trade Higher

DAX 30 Is Primed To Trade Higher

Alejandro Zambrano, Market Analyst

Yesterday the DAX 30 surged to the upper regions of its 10,730 - 11,033 range. The Index has since pulled back below the midpoint within the 10,730 - 11,033 range, but this has not altered the outlook for the DAX 30. The ECB is still ready to act in December and U.S. economic data has been surprising the markets, which are being underpinned with a bullish bias in the short and longer terms.

We remain optimistic and expect the index to try and break the upper limit of 11,033 in the coming days. If a successful break to the 11,033 level is seen, we would expect the DAX index to reach the August 13 high of 11,150.

A potential market mover on tap today is U.S. jobless claims, which is expected to print 270k (according to a Bloomberg News Survey). Numerus Fed speeches are also on tap.

While the U.S. jobless claims data is important, it will probably not cause a trigger to the lower end of the 10,730 - 11,033 range unless the outcome is grossly worse off than expected. Fed speeches should encourage expectations of a Fed rate hike, which is nothing new to the market.

Comments just made by ECB’s Mario Draghi ahead of the European Parliament adds to our bullish bias. Whilst he states that there are downside risks to the economy, he also reiterates his easing bias.

Below are some selected comments

  • Draghi: ECB will re-examine degree of accommodation in December
  • Draghi: QE will run past September 2016 if needed to reach the inflation goal
  • Draghi: Inflation dynamic has ‘somewhat weakened’
  • Draghi: Euro-Area Growth is slow, but stronger than in past

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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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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