DAX30 CFD landing between 12,300 and 12,450 before the Fed

By Admiral Markets

Source: Economic Events July 29, 2019 – Admiral Markets’ Forex Calendar

With a very thin economic calendar today, Monday, and the Fed rate decision coming on Wednesday, we want to focus now on the technical picture in the DAX30 CFD.

After the ECB “delivered”, as expected, a very dovish statement last Thursday with keeping interest rates unchanged, but an adjusted forward guidance which allows rate cuts, but also rate tiering (to relieve pressure on European banks resulting out of a collapse in yields) and QE in the near-term, the comments from ECB president Draghi that no rate cuts were discussed at the meeting among board members, pushing the German index aggressively lower.

Interesting enough, the DAX30 CFD found support around 12,300 points, but couldn’t recapture the region around 12,440/460 points into the weekly close.

In our opinion, this should be seen as the trading floor in which the German index will trade at least until the Fed on Wednesday.

Still, since the 1980s Equity markets have seen a drift higher in the hours before the Fed rate decision, expecting an equity-friendly stance.

That said, we tend to see a higher likelihood of an attempt to break above 12,440/460 points which could open the door for further gains up to 12,600 points.

On the downside a break below 12,300 points levels the path down to 12,150/200 points:

Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD Hourly chart (between 09 July 2019 to 26 July 2019). Accessed: 26 July 2019 at 10:00 PM GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.

Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD daily chart (between 17 April 2018 to 26 July 2019). Accessed: 26 July 2019 at 10:00 PM GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2014, the value of the DAX30 CFD increased by 2.65%, in 2015, it increased by 9.56%, in 2016 it increased by 6.87%, in 2017 it increased by 12.51%, in 2018 it fell by 18.26%, meaning that after five years, it was up by 10.5%.

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