- Risk-On mood spills over into the new week.
- Market sentiment boosted as Ukraine make inroads into Russian held territory.
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Sep 13
( 02:09 GMT )
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DAX 40: Rallies Above Key 13000 Level as Risk-On Mood Starts the Week
The DAX traded higher in European trade continuing from Friday’s risk-on sentiment with gains of around 180-odd points as we approach the US market open. European markets started the week on the front foot after Ukraine announced that it had made inroads into territory previously occupied by Russia.It would seem at the minute that news coming from the area is being viewed as bullish by markets. We have seen European gas and power prices decline on the news, which is a welcome relief to consumers especially since Friday’s meeting of energy ministers on price caps failed to make progress.
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Following last week’s jumbo rate hike by the European Central Bank (ECB) we have heard more hawkish rhetoric from ECB members. In contrast, German Deputy Finance Minister Florian Toncar warned that the country is facing increasing stagflation risks, something which has been discussed for quite some time. The ECB however are adamant that higher rates for longer will be needed to bring inflation under control, with Germany unlikely to deter them, stagflation or not. For Euorpe’s most industrialized economy and its biggest companies this does inspire confidence as consumers opt for necessities in the face of higher rates and a cost-of-living quandary.
In corporate news, the majority of the index is green with Heidelbergcement AG (HEIG) and Daimler Truck Holdings AG (DTGGe) leading the way with both up just shy of 4%. We have a busy day ahead on the economic calendar tomorrow with Germany and the Eurozone releasing its CPI (inflation) numbers tomorrow followed by ZEW Economic Sentiment Index.
For all market-moving economic releases and events, see the DailyFX Calendar
DAX 40 Daily Chart –September 12, 2022
Source: TradingView
From a technical perspective, we had a Bullish engulfing candle close last Friday which closed above the 13000 key psychological level. The weekly candle closed without any upside wick indicating strong momentum for buyers and a strong chance of upside this week.
On the daily timeframe we have had a nice bounce this morning with little to no downside move. We have broken above the 20,50-SMA with the 100-SMA now in sight just below the trendline. Price action shows that we failed to take out previous lows on the daily and have now printed a higher low, with a higher high needed to confirm the change of structure. This requires significant upside from current price which at this stage might require some form of catalyst.
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Key intraday levels that are worth watching:
Support Areas
•13240
•13110
•13000
Resistance Areas
•13470
•13680
•13771
| Change in | Longs | Shorts | OI |
| Daily | 0% | 41% | 21% |
| Weekly | -33% | 56% | 3% |
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Written by: Zain Vawda, Market Writer for DailyFX.com
Contact and follow Zain on Twitter: @zvawda