Dax digests weak factory orders, ZEW feeling follows
The Dax has been accumulating heavily over the past two months. The running higher starts to look a bit tired. Yesterday the Dax led losses in Europe, despite stronger-than-expected PMI data.
Today economic data is less encouraging, as German factory orders unexpectedly fall -3.7% MoM in May, less than -0.2% in April but much less than the expected rebound of 5%.
Attention will now turn to ZEW sentiment data, which is expected to soften slightly in July to 75.4, down from 79.8 in June.
Where next for the Dax?
After reaching an all-time high in mid-June, the price strengthened, forming a symmetrical triangle, covered on the lower side by a trend line originating from the beginning of the year and on the upper side by the downward trend line of all time. high.
The price could continue to consolidate sessions before seeking to exit the triangle on either side.
The 50 sma also appears to be strong support amid the symmetrical triangle pattern at 15600 break below here could indicate further losses.
The MACD appears to form a bearish crossover, maintaining a further downside.
Sellers would look for a break below 15530 and then 15450 horizontal support to see the sale gain traction.
Meanwhile, buyers will look for an escape beyond 15700 to later advance to 15800 and fresh all-time highs.
USD / CAD is declining while oil prices are rising
USD / CAD is trading under pressure, reversing Monday’s gains amid strong oil prices, Canada’s main export.
Oil prices are rising as OPEC + negotiations collapsed on Monday without an agreement to boost production. WTI collected at $ 76.90 its highest level in two and a half years.
A softer tone around the US dollar adds pressure to the pair. The U.S. Dollar Index is trading 0.1% tracking U.S. Treasury yields lower.
Looking ahead, U.S. ISM non-manufacturing PMI data will focus, a strong print could see USD / CAD try to rebound.
Where then for USD / CAD?
USD / CAD is lower, extending its move away from 100-day resistance. Failure to pick up this resistance level yesterday along with a bearish cross over formation on the MACD maintains an additional disadvantage.
A move below a 1.23 round number could open the door to a test of 1.2250 at the end of June, before the 50 dam will focus at 1.22.
Any significant recovery would seek to move above the downward sloping 100 dma at 1.2375 to target 1.2450 the July high.