The DAX 30 Trades Sideways Ahead of the IFO Business Survey
- The DAX 30 has been trading sideways since Tuesday of last week, while the multi-week trend has remained bullish at the time of writing.
- Much like the German PMIs of last week, today’s German IFO index will give us an early indication of economic developments in Germany.
The DAX 30 (CFD: GER30) was trading circa 40 points lower from Friday’s closing price in the first few minutes of the new week.
Since Tuesday of last week, the DAX had been trading sideways between the April 20 low of 10,283 and the April 21 high of 10,490. However, from a multi-week perspective, the bias was still bullish, as prices had been creating higher highs and higher lows over the last few weeks. The last significant lows for the multi-week trend are the April low of 9446 and last week’s low of 9914. We note that the trend is bullish as the last week’s low of 9914 is higher than the April low of 9446.
For the very short-term trend, the April 20 low of 10,283 is important. Support levels below the April 20 low of 10,283 are the April 14 high of 10,110, followed by the psychological level of 10,000, and last week’s low of 9914.
Resistance levels are last week’s high of 10,490. Beyond the 10,490 high, the next potential resistance level is the January 3 closing level of 10,692, followed by the December 30 high of 10,880.
The latest German IFO index report is on deck this morning. Much as the German PMIs published last week, the IFO will give us an early indication of economic developments in Germany. A Bloomberg News survey projects a rise to the Business Climate index from 106.7 to 107.1. Such a rise would be the second month of rising optimism amongst German business, which had been declining for three before last month’s rise to 106.7. A higher than expected outcome may exert bullish tendencies for the DAX while a lower than expected outcome may soften it.
DAX 30 | CFD: 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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