Top Story

Dax Rallies As Middle East Tensions Ebb

Dax has started Tuesday on firmer footing as sentiment improved surrounding the US – Iran flare up. Even though Iran continue to threaten revenge for the death of a top Iranian general on the orders of Trump, markets are defiantly attempting to shrug off those fears. 

Demand for riskier assets such as equities are on the rise, whilst the safe haven trade is starting to look tired. 

Data

Data from German has been encouraging so far this week.
  • German retail sales smashed analysts’ expectations jumping 2.1% mom in November, significantly up from October’s -1.6% decline. 
  • German service sector pmi also surprised to the upside calming fears of the ongoing manufacturing slump spilling over into the consumer sector. 
  • Today HIS/Markit data showed that the German construction sector expanded at the fastest pace in 9 months. 
There are certainly tentative signs that the slowdown in Germany is starting to bottom out. With the phase one trade deal expected to be signed between the US and China next week, there is also growing optimum that the German manufacturing sector, which is deep in contraction, could also be on the brink of turning a corner.

Euro weakness supports Dax
Despite the stronger data from Germany, Eurozone inflation ticking higher to 1.3% and eurozone retail sales increasing 2.2%, the euro remains on the back foot and below $1.12. The weaker euro is also offering support to the multinational exporters on the Dax.

Levels to watch:
The Dax jumped on the open and is trading 0.7% higher. The surge in the Dax has pushed it back above its 50 sma, giving the bulls the upper hand. Immediate resistance can be seen at 13280. A breakthrough here could open the doors to 13425 (2019 high).
On the downside support can be seen at 31188 and the 50 sma at 13157. A breakthrough these levels could see the Dax drop to 12884.


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.

The markets are moving. Stop missing out.

OPEN AN ACCOUNT