Global Equity markets plunged yesterday after data released showed that the U.S. trade deficit rose 43.1% to $51.4 billion in March, the largest since Oct 2008, after a surge in imports. Analysts said the deficit probably subtracted from growth, suggesting GDP could have contracted in the first quarter – see full article here.
The DAX was lower after the close on Tuesday, as losses in the Pharmaceuticals, Utilities & Telecoms sectors along with concerns over Greece also contributed to pushing shares lower.
Looking at the Hourly chart of the DAX below, one can see key zones were broken in yesterday’s trading. These are 11606/11595, the 11467/11457 and the 11328/11316. The 11316 level held as the Hourly candle closed at 11317. Why is 11316 so important? As stated in my article last Thursday, it is an important level to watch as it is the 50% retracement in price from when the ECB announced QE to the all-time highs.
(click to enlarge)
CONCLUSION – NEUTRAL
The market is choppy at the moment, so keep it simple and trade at/near key zones to minimise your risk.
For bulls, leaning against the 11316/11328 zone but faces resistance at 11457 and the Hourly 100 moving average (blue line in chart above).
For bears, shorting opportunities reside against the 11457, Hourly 100 MA and back up into the 11595/11606 zone.
Bearish targets :-
- 11316 (Bottom end of key zone)
- 11259 (Daily low)
- 11210 (Extension in Daily range – 22 day avg. is 242 pips)
Bullish targets :-
- 11458 (Daily Pivot & into key zone)
- 11501 (Extension in Daily range & close to 11503 – 50% retracement of yesterday’s move)
- 11600 (Psychological area and into key zone)