The DAX30 remains technically neutral, but the fundamental horizon darkens

By Admiral Markets

Source: Economic Events April 27, 2020 – Admiral Markets’ Forex Calendar

The DAX30 CFD has surprised over the last few days of trading with a relatively stable performance.

This is surprising because of developments in oil markets. The May contract settled at -37.63 USD/BBL last Monday, but the failure to reach a Coronavirus stimulus agreement during the EU summit last Thursday leads to the outlook that the Eurozone GDP faces a potential 5-10% contraction.

In regards to oil, further declines in the upcoming WTI contracts seems likely, resulting in turbulences around the globe. It may come with the US fracking industry facing troubles, insolvencies and bankruptcies, or with the Middle East as Saudi Arabia faces potential political instabilities, etc.

In regards to the lack of unity in the EU, the effectiveness of the ECB’s monetary policy without creating a unified structure to channel this liquidity to where it is needed, and support the badly hurt economy, will go nowhere.

That said, we’d be careful in terms of DAX30 CFD long engagements, even though short-term and technically we stay positive (even though with a neutral touch) as long as the German index holds above 10,100/150 points.

A drop below that level again leaves room for an accelerating drop which targets the region around 9,300 respectively 9,150/200 points in the days to come.

On the upside a push above 10,800 points activates 11,000 points as a next target, opening even further room up to 11,450/500 points:

Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD Hourly chart (between April 3, 2020, to April 24, 2020). Accessed: April 24, 2020, at 10:00pm GMT

Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD Daily chart (between January 10, 2019, to April 24, 2020). Accessed: April 24, 2020, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2015, the value of the DAX30 CFD 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%, in 2019, it increased by 26.44% meaning that after five years, it was up by 34.2%.

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