DAX 30 Remains Bullish As Turkey Shot Down Russian Jet
- Turkey downs Russian warplane on Syria border
- The DAX found support at 10,928 and remains bullish above 10,864
- German GDP and IFO Index Print Better than Expected
The DAX 30 remains bullish despite the panic this morning on news that Turkey shot down a Russian jet. At this time I suspect the political implications of this incident will be small as Russia and Europe/USA are working together towards defeating IS.
The DAX found support at 10,928, which is the support zone we pointed out yesterday. The DAX 30 remains bullish above the November 18 low of 10,864 and I see no need to change my bias so long as this level holds. The risk-reward ratio favors long positions at current levels, and we expect the DAX to move higher in the coming days.
The alternative scenario for the next bullish leg is a break to last week’s high of 11,154. In this scenario, traders are expected to rush to enter long positions with a target of 11,250 (a psychological level).
Suggested reading: German 3Q GDP Confirms Moderate Growth, Domestic Demand Key
German GDP and IFO Index Print Better than Expected
German 3Q GDP printed 1.8 percent YoY vs. 1.8 percent estimated (Bloomberg News Survey), which is an increase from 1.6 percent.
German IFO increased to 109 vs. economist projections of an unchanged reading at 108.2. This is better than expected and should keep the DAX buoyant.
U.S. GDP for 3Q is also on tap, but with the New Year just a few weeks from now, as with the German GDP data this morning we don’t expect any consistent market move on the outcome.
More important is U.S. house price data and U.S. consumer confidence. I would still be surprised if these indicators manage to budge the trend of the DAX and we would probably need several soft lower-tier data releases before the DAX and S&P 500 traders decide to act.
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
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