DAX: Reversing Sharp Down Open Following US Election Results
- Trump wins US elections, risk trade goes nuts
- The DAX opened down big, but is recovering from just beneath the important 9/30 low
- Volatility to remain elevated
The drama we came to know as the US presidential election has finally come to an end, and the result was not what the market was expecting. Donald Trump, the Republican nominee, took the victory, which sent financial markets into a tizzy long before the final numbers were in. As results rolled in and he gained momentum in key states US index futures started tanking. At one point S&P and Nasdaq futures were trading limit down before beginning to rebound in the early GMT hours.
This of course rocked markets around the globe – the Nikkei closed down 5.36%, Europe was down big, but coming back. The DAX opened down 300 points, but has come back sharply to sport only a 1.3% loss at this time. The open came just beneath the important 9/30 low when the market gapped sharply lower and rebounded on Deutsche Bank solvency concerns. That makes that low an important one. Today’s low was about 15 points beneath at 10175, so we will use that as our line in the sand for now.
Minor short-term resistance comes in at yesterday’s high of 10486, then the fill of the 11/2 gap at 10526. The trend continues to be unfavorable for determining any type of sustainable direction. Volatility is likely to remain elevated in the days ahead, making the best approach a very short-term one until further clarity is presented. Watch how the DAX responds once U.S. markets open at 14:30 GMT time.
Created with Tradingview
---Written by Paul Robinson, Market Analyst
To receive Paul’s analysis directly via email, please sign up here.
You can follow Paul on Twitter at @PaulRobinonFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.