The DAX is expected to open a little stronger on the back of strong rally being witnessed in Asia and the US markets overnight. The DAX was closed for trading on Friday. The German index has been in a strong downtrend over the past couple of weeks and found stiff resistance at higher levels at its 100 day moving average. The strong jobs report sent the US markets higher as the Labour Department reported that the US economy had added 248,000 jobs as against expectations of 215,000.
This has traders and investors worried that the Federal Reserve would be forced to raise interest rates, earlier than expected. Traders and investors would focus on the slew of economic reports coming out of the Eurozone in the coming week. The FOMC minutes, to be released on Wednesday, are also being considered to be market moving. The ECB chief Mario Draghi would speak in Washington which would be closely followed.
On the daily charts, the DAX is currently in a strong downtrend and has broken below key support levels at 9376. The index also trades well below its 100 day moving average at 9546. The momentum indicator for the DAX is in bullish territory and has given a sell signal which is a sign of a reversal which is indicative of the strong selling momentum present at the current moment. The relative strength index has formed a lower high and also given a sell signal confirming the fact that bears are in total control at the current moment. The next level of support for the DAX comes at 9180 whereas the resistance continues to be near the 9546 levels.
Short DAX if it closes below 9200 for a short term target at 9080
Long DAX if it closes above 9376 with a short term target at 9546