Dax Futures: Correction is over. The weather is not sunny in Germany
The fact that Germany data continues to fail to meet expectations and political uncertainties in Europe are preventing new highs in DAX futures contracts.
While the Brexit uncertainty continues, Italy’s disagreement as a rebel member of the Union declines with respect to Venezuela, while global liquidity continues to dry out while adding new uncertainties.
FED’s data-driven move in the last meeting couraged the indices bulls, however in the big picture FED continues to withdraw money from the market and only slowed down the speed.
In addition, forward-looking global growth forecasts are revised downwards.
Finally, in the US-China talks at the end of the month: the market may not find what it expects. The promises of the US and China could not create a positive impression so far.
Data from Germany this week
December Factory Orders -1.6% vs Market Expectation 0.3%
December Monthly Production% -0.4 vs Market Expectations 0.7%
The index broke the rising wedge on the weekly chart. It looks like the correction has been completed.
On the daily chart, DAX futures opened with gap today and filled the gap.
On the smaller charts, we see a head and shoulders pattern.
Bearish pressure will be triggered by the breakout of the neckline at 11.100.
Technically, as long as the price stays below 11.600, I expect the index to meet in short term:
11090 / Reached
10900 / Reached
In the long term:
and expecting a decline to 9400 levels
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