On Thursday ECB left interest rates unchanged as expected. On Friday investors got to know US job report. The unemployment rate dropped strongly (from 5.0% to 4.7%) but on the other side non-farm payrolls disappointed – 38K instead of 160K expected. The chances of interest rate hike in June decreased significantly. The closest FED meeting will be on June 15th.
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DAX
W1 time frame
Last week was not successful for German bulls. They not only didn’t manage to test 10,500 pts resistance, but also half of bullish candle from week before was covered. DAX is usually correlated with US S&P500 but now it lost power and is much weaker. The closeness of strong resistance took a role, it is additionally strengthen by upper band of bullish channel. DAX is moving inside this channel for over a year now, so quick break of it can be difficult or even impossible without longer consolidation. Only breaking 10,500-10,800 pts area will open way to further increases.
D1 time frame
Last week there was another test of support at 10,100 pts and lower band of the channel inside which DAX moves for few months. If 10,100-10,000 pts would be broke decreases can reach 9,800 pts area. Current base scenario is try of breaking 10,500-10,800 pts area. With help of gains on S&P500 it can be done.
S&P500
W1 time frame
Resistance at 2,100 pts confirmed its power last week but bulls don’t give up. It is worth to look on the index considering weakness of DAX and the fact that S&P500 is just few dozen pips from historical high. Base scenario is breaking 2,100 pts, of course if FED will not interrupt. In case of weakness S%P500 will be defended by 2,040-2,020 pts area.
D1 time frame
