Fundamental outlook

In this edition of the JRC Capital Management Weekly Outlook we review the German leading index DAX.

The whole discussions about trade wars were omnipresent in the past weeks. But Donald Trump and Jean Claude Juncker were able to agree on zero tariffs except for the automotive sector. That made for relief on the financial markets. Furthermore, the European Central Bank confirmed their monetary policy and stated that the interest rates will remain on that level until after summer of 2019. Another News that supports the markets.

In the coming trading week there are some important economic data on the agenda. On Monday, we expect the German consumer price index. The German labor market data and inflation data from the euro zone will be published. Towards the end of the week we expect important data coming from the United States. Among them the interest rate decision of the Fed and the nonfarm payrolls coming on Friday.

Technical analysis

Trend indicationResistance / Support
Short Term (daily)bullishResistance 113,000
Medium Term (weekly)neutralResistance 213,200
Long Term (monthly)neutralSupport 112,700
Support 212,500
Recovery for the DAX - DAX Chart

The trade war discussion caused a lot of uncertainty for the investors, on top of that the sell-off on the Chinese stock exchange did their duty and put pressure on the DAX. However, in this month the DAX was able to recover, and the latest positive mover are pushing it towards the mark of 13000 points.

This level will be the first resistance, if the recovery continues in the next week. At 13200 we can identify another important resistance area. In May/June the DAX formed a double top pattern in this region.

If the DAX gets under pressure again, we can observe a support area around 12700 points, close by the short-term trend line. Another important support area is located at 12500. This area served as support and resistance in the past.