DAX 30 Clears January Lows More Pain Ahead
The German DAX 30 breached its January 2016 low of 9253 this morning, triggering a decline to 9021 and representing Friday’s base case. With the latest slide in price, Friday’s high is the new trend defining level and I see no reason to expect a multiday bounce until this level is taken out.
As the overall trend is bearish, I would expect traders to use a pullback to the region of 9150-9340 as an opportunity to add to their bearish exposure. The DAX 30 may reach the August 2014 low of 8900 in the coming days ahead.
The US Dollar and yields gained as the details of the labor market report showed an improvement despite the headline figure printing 151K vs. the 190K expected.Wage growth increased by 2.5% YoY vs. the 2.2% expected and the unemployment rate dropped to 4.9% from 5%, possibly suggesting that there is less slack in the U.S. economy and thereby strengthening the Federal Reserve’s case for rate hikes.
E.U. Sentix Inventor sentiment report, which was published earlier today, declined to 6 from 9.6 in January, suggesting that E.U. economic growth is slowing.
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DAX 30 | FXCM: GER30
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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