Two trades to watch: DAX, FTSE
Fiona Cincotta October 25, 2021 3:08 AM
DAX edges higher, IFO business sentiment report in focus. FTSE rises after HSBC beats profit forecast.
DAX edges higher, IFO business sentiment report in focus
The German Dax, along with its European peers is opening the week on the front foot, after booking a loss across the previous week of 0.3%.
The market mood is broadly upbeat with European indices tracing Asian markets higher as earnings season really gets under way.
The economic calendar is light with the focus firmly on German IFO business sentiment. Supply chain bottlenecks and rising prices have weakened business sentiment and the outlook for business in the Eurozone’s largest economy. The IFO business climate has fallen for four consecutive months. Expectations are for a further move lower to 97.9 down from 98.8.Learn more about the DAX
Where next for the DAX?
The rebound in the DAX from 14812 has taken the descending trendline dating back to early September but is struggling to push beyond the confluence of the 50 & 100 sma at 15600 on the daily chart. The RSI is mildly above 50 keeping buyer’s hopeful of further upside.
A move above 15600, which could prove a tough nut to crack is needed to attack 15780 a level which offered resistance on several occasions across September before 16000 is targeted and fresh all-time highs.
On the flip side a move below 15400 could open the door to horizontal support at 15300. A move below here could negate the near term up trend and open the door to 15000.
FTSE rises after HSBC beats forecast
The FTSE looks set to outperform its European peers on the open as metal prices jump and HSBC reports encouraging earnings.
The heavyweight bank reported a 76% jump in Q3 profit to $5.4 billion ahead of expectations. Revenue came in at $12 billion, up 0.7% compared to a year earlier but below $12.3 billion forecast. Whilst the bank didn’t announce any dividends for the third quarter it did say it had plans to start a $2 billion share buyback shortly.
Separately metals jumped higher at the start of the week and oil reached a fresh multi year high which is likely to boost resource stocks on Monday.Learn more about the FTSE
Where next for the FTSE?
After breaking out above the descending trendline resistance and hitting a fresh post pandemic high at 7250 the FTSE has been in consolidation mode.
The FTSE trades above its 50 & 100 sma & the RSI is supportive of further upside. Buyers could look for a move above 7250 for fresh post pandemic highs.
7165 is a key support. Upon testing this level the price could rebound higher one more. Seller could look for a move below this level to, which could open the door to 7130 the trendline support and 7100 the 50 & 100 sma.
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
- Open a Forex.com account, or log-in if you’re already a customer.
- Search for the market you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.