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Dax 40 outlook: USD weakness, lower yields drive stocks higher

Dax (Germany 40) futures aim to clear technical resistance; USD weakness fuels demand for risk assets and Dow Jones (DJIA) futures retest 30,000.

Source: Bloomberg

Dax, FSTE and Dow Jones have opened the week higher as a weaker US Dollar (USD) and lower Yields boost demand for risk assets.

With Germany 40 futures heading back towards 12,700, UK 100 is holding above 6,855 while Dow Futures retest 30,000.
Although interest rates and recession fears continue to rise, major stock indices have shrugged off recent losses as investors shift their attention to Q3 earnings.

Dax 40 technical analysis

As Dax futures aim for their third consecutive week of gains, both psychological and technical levels continue to provide support and resistance for the European index. With the 12,700-psych level currently in play, the weekly CCI (commodity channel index) has risen back from oversold territory (a possible suggestion that the bears may be running out of steam).

Dax (German 40) Futures weekly chart

Source: TradingView

Meanwhile on a shorter timeframe, the daily chart below highlights the upcoming zones of confluency that may continue to assist in driving price action for the imminent move.

With the 78.6% Fibonacci retracement of the 2022 move providing an additional layer of resistance at 12,780, a move higher could see bulls driving prices back towards the August high of 12,847. However, if 12,700 fails to hold, a drop back towards 12,400 and below 12,000 may pave the way for another bearish move.

Dax 40 Futures daily chart

Source: TradingView

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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