DAX , Oil Forecast: Two Trades to Watch

DAX rises amid an upbeat mood

US NFP data supports view Fed could pause rate hikes
German trade surplus shrinks
DAX needs to rise above 16000 to extend its rebound

The DAX, along with its European peers is set to start the week on the front foot after gains in Asia and as the market continues digesting Friday’s Goldilocks non-farm payroll report.

The US jobs report showed robust job growth along with a rise in unemployment which supported stocks. The data points to the Fed keeping interest rates on hold at the coming meeting and potentially achieving the elusive “soft landing scenario”.

Meanwhile, in Asia news that China’s struggling Chinese property developer Country Garden reached a deal with creditors is also boosting the market mood, driving risk on trade.

On the data front, the German trade surplus narrowed by more than expected to €15.9 billion down from €18.7 billion.

The data comes after German manufacturing PMIs on Friday painted a grim outlook for the German economy.

Looking ahead, ECB President Christine Lagarde and chief economist Philip Lane are both due to speak and could shed some light on the outlook for the economy and future rate hikes. A less hawkish-sounding Lagarde could help lift the DAX.

DAX forecast – technical forecast

DAX rebounded from 15465 crossing above the 20 sma but stalled after failing to push meaningfully above 16000. This is the level that buyers will look to rise above in order to extend the rebound towards 16200 the May high ahead of 16530 and fresh all-time highs.

On the flip side, 15700 offers support, with a break below here opening the door to 15466.

Oil steadies after strong gains

Oil rose 7% last week on supply concerns
US labour day trading could be muted
WTI needs to rise above $86.00 to extend the rebound

Oil prices are holding steady after rallying over 7% last week reaching a level that was last seen in November last year.

Supply concerns were a principle driver in the rise in oil prices as Saudi Arabia is expected to extend its 1 million barrel per day production cut into October, which comes in addition to the broader OPEC+ agreed output cut.

Meanwhile US inventory data from the EIA shades that US crude oi stockpiles fell by more than expected, dropping 10.8 million barrels.

Better than expected Chinese manufacturing PMI data, plus more stimulus measures from Beijing also underpinned the demand outlook.

Friday's nonfarm payroll has been seen and safe public clear for bold as more jobs were added in expected but wage growth cooled and unemployment rose. The report is supportive of the view that the Federal Reserve could pause it's rate hiking cycle, which could benefit the oil demand outlook.

Today the US is on its Labour Day bank holiday so trading could be muted.

Oil forecast – technical analysis

After a steep runup last week WTI is easing back from last week’s high of 86.09. The RSI supports further upside while it remains out of overbought territory.

Buyers will look to rise above 86.09 to bring 89.40 the November 14 high into focus ahead of 93.20 the November high.

Support can be seen at 84.60 the August high, with a break below here opening the door to 83.50 the April high before exposing the 20 sma at 81.60.

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. Products and services available depend on your location and the entity holding your account. Before deciding to trade forex, commodity futures, or digital assets, 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 StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.

FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.

GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.