Bottom line:  DAX remains bearish against 13800 levels, in the long run. The counter trend rally has now hit resistance around 10700 levels as traders prepare to resume lower again.

Fundamental Outlook:

DAX outlook looking gloomy alongside Global Indices, as investors fear worst ever recession ahead. The indice has managed to loop back towards 10600/700 levels and a push higher might attempt to fill gap around 11200, going forward. That being said, the decline may soon resume towards 8000 levels.

WTI Crude drops historically, printing below the $1 per barrel mark yesterday. The year 2020 has seen 65.62 being print in early January and now 0.01 lows in April. OPEC members had agreed to cut production by around 10 million per day, along with Russia and Saudi Arabia agreeing to end price war. Nothing could stop a 99.95% drop in WTI Crude prices yesterday.

Events to watch today:

05:00 AM EST Euro Zone ZEW Survey

05:00 AM EST German ZEW Survey Expectations

Technical Analysis:

DAX counter trend rally seems to be close to termination as prices test resistance around 10600/700 levels again. A push above recent swing highs could open doors to 11200/300 levels before resuming lower again.

Strong counter trend rallies in a bear market is common and technically healthy. Please note that DAX has retraced up to fibonacci 61.8% of the recent drop from 12300 through 8200 respectively. High probability remains for a bearish reversal around current price action.

Immediate price resistance is seen at 12300, while interim support comes in around 9340 mark respectively. With respect to price action, a push below 10243 would trigger further sell off and confirm a meaningful top in place already.

Most traders might be willing to initiate fresh short positions between 10600 and 10750, with protective stops above 12300 and projected targets below 8000.

Prepared by

Harsh Japee, Technical Analyst.

DAX Chart

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