Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
DAX 30 Trades Lower After Trying To Break High

DAX 30 Trades Lower After Trying To Break High

Alejandro Zambrano, Market Analyst

Share:

Talking Points

  • The DAX 30 (FXCM: GER30) made an attempt to trade higher today as yesterday’s dovish response from the Fed boosted risk appetite, however, that initial price boost has resulted in a short-term reversal.
  • The trend is bullish above the ECB rate meeting low of 9397 from Thursday of last week.
  • Later in the day, both the Philadelphia Fed and Jobless Claim figures are on tap.

The DAX 30 (FXCM: GER30) made an attempt to trade higher today on the back of yesterday evening’s dovish Fed response.

The Fed is now via the ‘dot plot’ projecting two rate hikes from four projected in December 2015. The fragile global economy and financial market developments are cited as reasons to lower the amount of rate hikes. We also note that the Fed projects PCE inflation to be at 1.2% YoY by the end of 2016 from 1.6% in December.

The effect of the dovish Fed sent yields lower, the U.S. 2 year swap rate declining from 105bps to the current 89bps being one example. The lower U.S. yields have tended to boost stocks.

Technical Trend Remains Bullish

The short-term trend is bullish above the ECB rate meeting low of 9397 and the DAX may reach the January 13 high of 10,166. Beyond the 10,166, the next line of resistance and potential target for bullish traders is the January 5 high of 10,395.

A pullback in price could well be viewed as a buying opportunity as long as price does not slide below last Thursday’s low of 9397. On a slide below Thursday’s level, the short-term uptrend would end. In this scenario, the price may reach the February 24 low of 9122, followed by the February 11 low of 8705.

Later in the day the Philadelphia Fed and Jobless Claim figures are on tap. For the estimates and more economic indicators on tap today, see our economic calendar.

Download the DailyFX Analysts' 1Q forecasts for the Dollar, Euro, Pound, Equities and Gold

DAX 30 | FXCM: GER30

Please add a description for the image.

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

Struggling with Trading? Join a London Seminar

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

DISCLOSURES