DAX 30 Remains Bearish Below Wednesday’s High Of 9129
The DAX 30 (FXCM: GER30) is bearish below Wednesday’s high of 9129 and given this downtrend, traders will most likely use a correction to 9000 as an opportunity to add to their bearish exposure with stops above 9129. They will most likely target this week’s low of 8696 and on a break to this level, the psychological key level of 8500.
However, caution is warranted given that the DAX 30 has lost near to 11.5% of its value over the last 2.5 weeks. This will make it tempting for bearish traders to reduce their exposure. The Japanese government also looks to be ready to intervene in the forex markets, which may lift the USDJPY and equity indices.
U.S. Retail Sales on Tap
Bearish news this morning is E.U. Industrial Production declining by 1.3% YoY in December, which points towards a slower E.U. economic growth, yet the market is disregarding this for now. In the afternoon, U.S. Retail Sales and University of Michigan Consumer Sentiment will be key outcomes for the DAX 30.
Better than expected readings may boost the DAX, while softer outcomes may trigger declines. At this stage though, I don’t expect the DAX 30 to breach Wednesday’s high of 9129, independent of the data outcome. Please see our economic calendar for market consensus projections.
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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