European Open: DAX retests 13k, UK GDP and German retail sales up next

Despite a false break of 13k last week, I see the potential for the DAX to continue lower and break that key level.

Germany

Asian Indices:

  • Australia's ASX 200 index fell by -83.6 points (-1.25%) and currently trades at 6,616.60
  • Japan's Nikkei 225 index has fallen by -370.65 points (-1.38%) and currently trades at 26,430.15
  • Hong Kong's Hang Seng index has risen by 73.71 points (0.34%) and currently trades at 22,070.60
  • China's A50 Index has risen by 307.36 points (2.09%) and currently trades at 15,039.31

 

UK and Europe:

  • UK's FTSE 100 futures are currently down -49 points (-0.67%), the cash market is currently estimated to open at 7,263.32
  • Euro STOXX 50 futures are currently down -18 points (-0.51%), the cash market is currently estimated to open at 3,496.32
  • Germany's DAX futures are currently down -59 points (-0.45%), the cash market is currently estimated to open at 12,944.35

 

US Futures:

  • DJI futures are currently down -96 points (-0.31%)
  • S&P 500 futures are currently down -51 points (-0.44%)
  • Nasdaq 100 futures are currently down -15 points (-0.39%)

 

20220630futuresCI

20220630futuresFX

 

China’s equity markets were the clear leaders overnight after manufacturing and service PMI’s both expanded in June. We noted in today’s article that the China A50 is on track for its most bullish month since January 2019, and that we may have seen the end of an important swing low in March.

 

The Japanese yen and euro are currently the strongest majors, although the yen was initially the weakest after industrial output slumped to its lowest level since the pandemic, reinforcing the BOJ’s view that policy is to remain accommodative. Yet given an ex official has (twice) said he expects the BOJ to intervene and support the currency, traders appeared betting against the yen overnight.

 

The British pound remains bruised following dovish comments from an in-coming policymaker, Swati Dhingra. GBP/USD is consolidating just above yesterday’s lows with the 1-hour chart within a strong downtrend. Eyes are now on GDP figures released shortly, and out bias on GBP remains bearish below 1.2600.

 

 

DAX daily chart:

20220630daxFX

The initial break below 13,000 failed to hold below that key level the following day. Whilst this is a good indication of a bear trap it is worth noting that the bullish follow-through lacked conviction and ended with a bearish hammer and small bearish pinbar (also an inside bar). Both of which respected the 10-day eMA as resistance. Momentum has since realigned with its bearish trend, and moved bac to 13,000. Futures markets are pointing to a weak open so we’re looking to see if we can finally get a decent break beneath the 12,912 swing low and continue towards the 12,500 support zone.

 

DAX 30 trading guide

 

Economic events up next (Times in BST)

The Chicago PMI report is set to be released at 14:45 – as noted previously I’m keeping a close eye on regional PMI reports as they can provide a lead for national reports such as the ISM (which is released tomorrow). The Chicago PMI has held up better than the Philly Fed and Texas business sentiment surveys (so far at least) but a weak print today could further weigh on sentiment.

20220630calebdarBST

 

FTSE 350 – Market Internals:

FTSE 350: 4053.98 (-0.15%) 29 June 2022

  • 65 (18.52%) stocks advanced and 280 (79.77%) declined
  • 7 stocks rose to a new 52-week high, 8 fell to new lows
  • 20.23% of stocks closed above their 200-day average
  • 87.75% of stocks closed above their 50-day average
  • 1.42% of stocks closed above their 20-day average

 

Outperformers:

  • + 5.54% - 888 Holdings PLC (888.L)
  • + 2.90% - Standard Chartered PLC (STAN.L)
  • + 2.49% - AstraZeneca PLC (AZN.L)
  •  

Underperformers:

  • -16.34% - Carnival PLC (CCL.L)
  • -9.81% - Aston Martin Lagonda Global Holdings PLC (AML.L)
  • -8.66% - British Land Company PLC (BLND.L)
  •  

 

 

 

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