Both DAX and S&P500 had correction as expected. The open question is whether this is the end of decreases or just a beginning.
In the following week there will be some interesting macro data:
- Tuesday: German CPI
- Wednesday: US PPI and retail sale
- Wednesday: EU PPI
- Thursday: EU CPI
- Friday: US industrial production
The most important event will be next week’s ECB meeting with interest rates decision.
S&P500
Last week I predicted index behaviour. Correction led index to 2,040-2,020 pts area and this level caused rebound. It is too early at the moment to say whether correction is ended or not, if bears will be strong enough there can be test of 2,020 pts support which should be defended by bulls.
DAX
After setting island reversal pattern, last week was bearish for German index. We have to say that current DAX movement is hard to trade because index is opening with large gaps and then is flat all session. As you can see on the chart last 4 sessions were just passing 9,600 pts level. It is also worth to take a look at volume where you cannot see any bigger assets. If you compare March volume to current you can notice that big players stay aside.
YOU CAN START TRADING ON FOREX MARKET USING FREE XM BROKER ACCOUNT.
Bullish side isn’t helped by EURUSD behaviour. Current flat move around key resistance on 1.1480 looks like consolidation before breaking this level. If it will happen and new bullish wave will show up on this pair it will make it even more difficult for DAX bulls. On the other side if ECB statement will be dovish, we can expect decreases on EURUSD.
On weekly chart we cannot see any strength of buyers or sellers. Bears are still in power because of large bearish channel in which index moves since April 2015. The closest key support is in 9,400 pts area and the resistance is at 10,100 pts area. Breaking one of these levels should start more dynamic moves.
