DAX 30: Carving Out a Higher Low Following Test of Support
- ECB meeting fails to spark volatility, back to business as usual
- DAX turns higher from key support zone
- Higher low taking shape, higher high next phase in bullish sequence
Yesterday turned out to be a rather uneventful ECB meeting with the central bank making no adjustments to its monetary policy as expected. Draghi said nothing out of the ordinary and suggested a ‘wait-and-see’ approach regarding its current policy stance.
The DAX made good on our noted key support zone between 10100 and 10150 by carving out the daily low at 10152 before eventually moving on to higher levels. This constitutes a successful test of two trend-lines of varying degrees on the daily chart as well as the intra-day inflection points created over the past few weeks.
With the DAX turning up and looking to cement itself a higher low, this creates the possibility of seeing a higher high in a developing bullish sequence off the May lows. The next area of resistance comes in by way of the Tuesday high at 10374. A break above resistance should lead to the 4/21 peak set at 10486. Should the market fail to achieve a new high on this push, not all is lost yet. The alternative would be for a sideways congestion phase which would still be viewed as bullish as long the DAX trades above the before mentioned support. A daily close below 10100 would be required to seriously jeopardize the current view.
DAX (GER30) Daily
Later in the session we have the U.S. jobs report at 12:30 GMT time, which could cause a bit of volatility should non-farm payrolls come in significantly above or below expectations. Analyst are looking for NFP to show the economy added 160k new jobs in May, while the unemployment rate ticks lower to 4.9% from 5%.
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---Written by Paul Robinson, Market Analyst
You can follow Paul at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.