With the exception of the Shanghai Composite, equity markets across the globe continue to sell off ahead of the U.S. Nonfarm payrolls figure released later today at 13:30 GMT – see full article here
U.S. Nonfarm payroll figures are expected to come in at 225,000, which could see the possibility of the first U.S. Interest Rate hike by the Fed as soon as September. However, only 1 in 3 analysts are predicting this, and see December as a more likely timeline. Yesterday IMF Managing Director Christine Lagarde made comments as to how the Fund thinks 2016 is a more sensible recommendation for the first rate hike – see full article here
Looking at an Hourly chart of the DAX below, one can see that in trading yesterday bullish attempts on a move higher were quashed going into the 100 moving average (blue line in the chart below). Bulls made two attempts for price to close above this level, but failed on both occasions. It was then clear as to the predominant bias present in the marketplace and price rotated back to the downside.
(click to enlarge)
CONCLUSION – NEUTRAL
One will have to wait until after 13:30 GMT in order to ascertain the correct market bias present for the DAX in trading today. Currently price resides below the Hourly 100 MA, which is proving to be somewhat of a problem for the bulls on any advances higher.
For bulls, even if the Hourly 100 MA is taken out, the Hourly 200 MA still acts as strong resistance. For risk averse, price can be easily defined on a break and close above the Hourly 200 MA. For bulls, risk defining opportunities are into the 11193/11174 zone or a break of the Hourly 100 MA.
For bears, expect to see attempts at shorting into the Hourly 100 & 200 MAs. For the risk averse, risk can be defined on a break of the 11163 level, the lows from May.
Bearish targets :-
- 11163 (May low & close to Daily S1 Pivot 11158)
- 11059 (61.8% retracement of ECB QE announcement late Jan – April high)
- 11018/10986 zone
Bullish targets :-
- Hourly 100 MA
- Hourly 200 MA
- 11574 (38.2% retracement of ECB QE announcement late Jan – April High) & close to Daily R2 Pivot 11570