I am back from a break to sunny, warm & a very green Ireland – I would highly recommend Galway.
The Euro has continued to edge higher in trading today off the back of comments from the Fed yesterday, signalling a delay in rate hikes combined with Greece’s drift closer to default has resulted in pushing European stocks lower.
Investors across the globe were eagerly awaiting news out of the U.S. yesterday, as U.S. Federal Reserve Chair Janet Yellen spoke at a press conference on the future of U.S. Interest Rates. The Fed said on Wednesday that the economy was probably strong enough to support a rate increase by the end of the year. But it lowered its forecasts for 2015 economic growth because of a weak start to the year and reduced its federal funds rate forecast. By December 2017, the Fed expects its benchmark short-term interest rate to remain below 3%, far lower than it has been for the past half century this long into an economic expansion – see full article here
The DAX and other European equities not only have fallen due to a stronger Euro but also with Greece. The Greek debacle with meeting the needs and negotiating terms with its IMF creditors continues to trundle on. Greek Prime Minister Alexis Tsipras spoke out saying that “The blind insistence of cuts (in pensions) in a country with a 25 percent unemployment rate and where half of all the young people are unemployed will only cause a further worsening of the already dramatic social situation” – see full article here
Looking at an Hourly chart of the DAX below, once can see price is below it’s Hourly 100 & 200 moving averages (blue & green lines) but has managed to hold against the 10800 for the second time this week.
(click to enlarge)
CONCLUSION – NEUTRAL
The intermediate bias is bearish at present with price below it’s Hourly 100&200 MA’s. However, with price failing to break the 10800 in the European morning session so far, the bias leans towards neutral at present.
For bulls, the 10892/10856 zone is key today, with price as of yet failing to close below this level on the Hourly chart. The line in the sand for bulls today will be the 10800 level. If price manages to hold against these two areas, expect to see resistance into the 11018/10986 zone as this is where the Hourly 100 MA currently resides. Look for risk averse investors entering on a close above the Hourly 200 MA.
For bears, the Hourly 100 MA is the line in the sand in trading today. Shorting opportunities reside into the Hourly 100 MA, 11018/10986 zone or a break of 10800 for the risk averse investors.
Bearish targets :-
- 10798 (Low from yesterday)
- 10743 (Extension of Daily range – 22 day avg. 218 pips)
- 10722 (Daily S2 Pivot)
Bullish targets :-
- 10986 (Key zone)
- 11023 (Extension of Daily range + close to Hourly 100 MA)
- 11058 (Daily R1 Pivot)