An eventful week of macroeconomic news continues today with the European Central Bank’s Interest Rate decision at 12:45 GMT and a press conference chaired by president Mario Draghi at 13:30 GMT. Expectations are for Draghi to re-emphasise full commitment to its €1.1 Trillion Quantitative Easing program which started in earnest back in late January – read full article here
Markets are still jittering over the prospects of Greece’s ability to make repayments to the IMF on June 5th. The first of four payments due this month totalling €1.6 Billion will not be paid unless an aid-for-reforms-deal is struck between its international creditors soon – read full article here
The DAX is holding up steady enough in trading today as stronger than expected data out of Germany & the Eurozone was released. German Services PMI came in at 53 vs expectations of 52.9 and Eurozone Services PMI came in at 53.8 vs expectations of 53.3 – read full article here
Looking at an Hourly chart of the DAX below, one can see price is using the 11328/11316 zone as a good floor of support at present. Over the last 24 hours, there has been only one close below this zone. On the Daily chart, price did close below the Daily 100 moving average, but has still failed to close below the key 11316 50% retracement level of ECB QE in late January to the highs in April (see previous article here with levels)
(click to enlarge)
CONCLUSION – NEUTRAL
The price is firmly below its Hourly 100 & 200 moving averages (blue & green line in the chart above), but trader sentiment seems to be quite resilient at the 11328/11316 zone. Look for more clues as to which way the market bias is leaning after the ECB press conference later this afternoon. Keep in the back of your mind also, U.S. Nonfarm payrolls are due out this Friday.
For bulls, price needs to stay above the 11328/11316 zone, which is the line in the sand for bulls today. It’s next key target is the 11467/11457 zone but the Hourly 100 MA is lingering just above, so could inflict some pressure on the bulls on any advances higher. Opportunities with risk defined, are against the 11328/11316 zone, or a break of 11467 and managing to hold above the Hourly 100 MA.
For bears, the line in the sand is the Hourly 200 MA, with shorts coming into the market at 11467/11457/Hourly 100 MA & 11606/11595 areas. For risk averse, 11316 needs to be taken out with targets then at 11193/11174. IF prices collapses through that zone, expect big buying pressure at the 11018/10986 zone.
Bearish targets :-
- 11268 (Yesterday’s low)
- 11193 (Key zone)
- 11169 (Extension of Daily range – avg. last 22 days is 236 pips)
Bullish targets :-
- 11457
- 11532 (Extension of Daily range)
- 11595 (Key zone)