dax
Dax index started higher on Wednesday following heavy losses in yesterday’s session, as investors eyed the monetary policy decision from the Federal Reserve. Traders should be cautious today as the decision and the press conference might create high volatility in the markets. Fed members have hinted in recent public statements and interviews that they are in no hurry to announce details of their future monetary policy at the end of their June meeting.
The Fed cut interest rates in March to almost zero. In April, reaffirmed the stance to keep interest rates low until it is confident that the economy is on the right track to push inflation up to its 2% and unemployment to drop again. The Fed will also publish new economic and interest rate forecasts after the quarterly projections in March.
Yesterday, the German exports came down by 31.1% month-on-month for April, the largest drop since 1950, while imports came down by the most since the financial crisis.
Deutsche Bank is the leader today adding 3.46% at 8.92. Dax index also getting a boost from Daimler +1.89% at 39.71, Lufthansa +0.51% at 11.91, Deutsche Post +1.22% at 31.59 and Allianz +1.63% at 190.40.
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Dax index is 0.88% higher at 12,732 as the index consolidates at 14-week highs keeping the bullish momentum intact despite yesterday’s sharp correction. The RSI index is hovering in overbought levels, and a pullback can’t be ruled out. The overall technical outlook is bullish as long as the index trades above the 200-day moving average.
On the upside, initial resistance for the Dax index stands at 12,763 the daily top. A move above 12,763 would target 12,923 the high from yesterday’s trading session. A break higher might challenge 13,144 the high from February 25th.
On the flip side, first support for the Dax stands at 12,705 the daily low. In case the index breaks below, then the next support is at 12,333 the low from June 4th. Below 12,333 the next support area will be met at 12,137 the 200-day moving average.