DAX index price action
Asian session and start of European session is very much cautious as traders are in indecision about where markets now supposed to go. There are a some economic (PMI) data today in Europe to offer a clue, but right now investors mainly trying to understand if yesterday’s risk-on was a start of a new buying frenzy or it is just a dead-can bounce.
Markets are in a mixed mood with bond/Treasury yields continuing to fall further. I believe we need to pay close attention to what Larry Summers reportedly said – the best way to take out recession or slowdown insurance would be for the Federal Reserve to cut interest rates by 50 basis points over the summer and by more, if necessary, in the fall.
Apparently, this is it. If so – and Central Banks globally demonstrate this approach – we will likely to see more easing. And markets love it.
Looking at 4-hour chart, we see downward sloped resistances and selling pressure is still big. Therefore, be mindful of 11990 and 12100 resistance levels – price will need more optimism to overcome those.
I am not going to play long just yet. Place Sell Limit order at 12100 and wait for the price to approach it. This level is likely to sustain at first and sell from 12100 is a good bet. This is a tactical sell, therefore, take profits quickly.
For the market to turn bullish again, index needs to break above 12100 and to stay there.
Have a nice day,