The DAX (GER30) is moving laterally in a sideways rectangle pattern. Support is around the 15,000 level, with resistance around the 16,000 level (green shaded horizontals). Last week's candle is a bullish Dragonfly Doji. I.e., bears lost control at the low, and the week ended with the bulls in control. However, we are looking for follow-through this week as confirmation, which is yet to be established. This week's candle (still to complete) shows a loss of control by bulls at yesterday's high. A close above the aqua horizontal is needed to be confident in the follow-through.
The daily chart shows the DAX (GER30) in its neutral area, between the blue bands. There is a gap lower on today's open; sentiment is risk-off after disappointing results from Meta Platforms overnight. Moreover, market participants are focusing on the ECB meeting, given that inflation rose to 5.1% in January (4.4% - forecast). Another concern is the drop in the PMI to 52.3 in January from 53.3 in December. If the price drops below the lower blue band, the DAX (GER30) will enter bear territory on the daily.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.