DAX 30 Pulls Back Fueled By Softer Basic Resources, Oil & Gas Sectors
- DAX trades lower in line with Europe and at this point I am treating this as short-term correction
- The DAX is short-term bullish above the December 28 low of 10,621
The DAX 30 is lower by 0.46% at the time of writing, with the decline mainly fueled by declines in Basic Resources and Oil & Gas Sectors. Given the overall bullish trend I am seeing today’s decline as a short-term correction rather than the beginning of a new trend.
The DAX is short-term bullish above the December 28 low of 10,621 and traders will probably opt for long positions if the DAX 30 sees stabilization in the 10,785 to 10,724 range. The general idea is for the bullish trend to resume and the DAX reaching 11,000 in the next few days, and for it to eventually reach the regions of the December 3 high at 11,321 in the weeks ahead.
In the scenario where the December 28 low at 10,621 does not hold as support the short-term trend will turn neutral and DAX traders will probably aim for the psychological price level of 10,500. Traders will then try to target the December 22 low at 10,395. However I see it as unlikely for price to break this level at this point.
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Pending Home Sales
The only data ahead of us in today’s session is U.S. Pending Home Sales. A Bloomberg survey projects a rise of 4% year-on-year. I don’t expect this economic indicator to carry too much weight in people’s trading decisions. Rather focus will on Monday’s U.S. ISM Indicator and Markit PMI Manufacturing.
DAX 30 / GER30
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
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