Two trades to watch: DAX, GBP/USD
Fiona Cincotta June 7, 2021 2:49 AM
Dax drifts away from all time high. German factory orders unexpectedly fall. GBP/USD trades under pressure amid rising covid cases & Brexit concerns.
Indices search for direction -German Factory orders unexpectedly fall,
German factory orders fell -0.2% MoM in April, down from 3% rise in March and falling short of 1% increase forecast.
The market mood is mixed following the US NFP miss on Friday and after China exports surged but also missed expectations.
Where next for the Dax?
Dax is easing slightly lower in quiet trade at the start of the week. It continues to hover around the All-time high reached on Friday of 15707.
The Dax trades above its multi-month ascending trendline and above its 50 & 100 sma on the 4 hour chart showing an established bullish trend.
However, the MACD could be forming a bearish cross over.
It would take a move below 15460 to negate the near term uptrend. Below here support can be seen at 15350 low May 27 and 15250 the ascending trendline support.
Resistance is seen at 15700/10 the all time high with the buyers then targeting 15800 ahead of 16000.
GBP/USD weighed down by Covid, Brexit
GBP/USD trades lower on Monday, failing to extend Friday’s gains as covid and Brexit concerns return.
Doubts are growing over whether the June 21st Freedom Day will go ahead after Mat Hancock health secretary hinted the date could be pushed back as covid cases rise steeply in UK.
Brexit talks could drag on the Pound as both the UK and EUE prepare for talks this week on a part of the Brexit deal that governs trade with Northern Ireland. Since the UK left the EU, relations have deteriorated between the two sides with both accusing the other of acting in bad faith over the Northern Ireland protocol.
The US Dollar is heading higher tracing yields higher as attention turns to US CPI data later in the week. 10 year yields are at 1.57% but this is still below where yields were before Friday’s disappointing NFP report.
Where next for GBP/USD ?
GBP/USD is trending lower, trading below its descending trendline dating back to the start of the month. It has fallen below its 50 & 100 sma on the 4 hour chart.
The RSI is pointing southwards in bearish territory suggesting there could more downside to come.
A break below support at 1.4090/80 could open the door to a deeper selloff towards 1.4050 the 200 sma.
Meanwhile a move above 1.4165 the descending trendline and the 50 sma could negate the near term bearish trend and see buyers target 1.42 round number.
Learn more about trading forex
-
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.