Is the DAX30 currently waiting in the calm before the storm, below 8,000 points?

March 23, 2020

By Admiral Markets

Source: Economic Events March 23, 2020 – Admiral Markets’ Forex Calendar

Selling pressure on the DAX30 CFD remained high over the last week of trading, despite the massive monetary stimulus from the Fed on March 15, cutting rates to 0.0%-0.25% and launching a massive QE program of USD 700 billion, and by announcing swap lines with global central banks to make sure that enough USD is available and cutting reserve ratios for banks to 0. It also didn’t shift despite the massive monetary stimulus announced from the ECB on Wednesday evening.

The ECB went “all in”, launching a 750 billion euro emergency bond purchase scheme in a bid to stop a pandemic-induced financial rout from shredding the euro zone’s economy.

Still, the German index saw a solid weekly close, and if bulls and indications intensify that, the DAX30 CFD may have found, at the very least, a short-term bottom.

While volatility should be expected to stay massively elevated, the main focus on the upside is at the region around 9,150/200 points, and a break higher would accelerate the bullish momentum, bringing a re-test of the region around 10,000 points into play.


Free Reports:

Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter





Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.





Nevertheless, the re-installed swap lines of the Fed is especially noteworthy since the world has built an enormous pile of USD debt over the years (especially over the last decade with the massive Fed QE), where 12.8 trillion of USD debt can be found in the books of banks around the globe. And this US dollar shortage will likely continue and force market participants to keep on dumping their Equity positions with the target to stay as liquid as possible.

That said, we stay bearish for the DAX30 CFD for the time being, consider any bullish stints as short-lived and see a drop as low as 7,500/8,000 points as a serious.

Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD Hourly chart (between March 4, 2020, to March 20, 2020). Accessed: March 20, 2020, at 10:00 PM GMT

Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD Daily chart (between December 5, 2018 to March 20, 2020). Accessed: March 20, 2020, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2015, the value of the DAX30 CFD increased by 9.56%, in 2016, it increased by 6.87%, in 2017, it increased by 12.51%, in 2018, it fell by 18.26%, in 2019, it increased by 26.44% meaning that after five years, it was up by 34.2%.

Discover the world’s #1 multi-asset platform

Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter “Analysis”) published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter “Author”) based on the Author’s personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
  7. Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
  9. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.

By Admiral Markets

InvestMacro

InvestMacro is a finance website dedicated to helping investors make better informed decisions through educational content and products