GER30 (DAX) after breaking below 15400 price action, drove the market towards our major support zone 15107 and 14891 - where we have our 61.8% and 50% fibo retracement level supporting the prevention of further breakout. GER30 (DAX) made a minor bullish retrace on 29th Sept but failed to break above the exponential moving average 50 and continued losing the hawkish edge by falling towards 50% fibo level at 14891. The high supply demand zone was also provided a pillar of support by exponential moving average 200 in the daily time frame - that compelled GER30 (DAX) to sustain above the aforementioned zone in order to gain some ground for the continuation of bullish rally. German industry is facing a challenging and complex environment. When lockdown restrictions were lifted around the world, supply chain frictions overshadowed any rebound effect and sent industrial production into negative territory.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Instead of the hoped-for rebound, disappointing industrial production in August suggests that the traditional growth engine of the German economy will again be a drag on growth in the third quarter. On the technical side, for the bearish rally to trigger, GER30 (DAX) needs to break below 50% and 38.2% fibo level 14891 and 14675 in order to activate the dovish trend and force the indice to fall towards 14400. On the bullish side, GER30 (DAX) needs to regain the 15107, 15400 and 15600 region to confirm that the indice will setting record highs again. Until the aforementioned scenarios are met, 15500 and 14891 is a consolidative extended structure zone where might experience a side wave formation and need to trade within until a vivid breakout is found. 

GER30

Oct 08 2021