The DAX 30 appears to be in a corrective mode and may decline to the range of 9336 to 9500 before traders see the risk/reward ratio as sufficient enough for fresh bullish positions.
However, on a break to the February 29 low of 9336, the same bullish traders will most likely head for the exit as the trend may have rolled over at this stage and price may reach the February 24 low of 9112.
The alternative entry for bullish traders is a break to the January 27 high of 9931, as such a break may generate enough momentum to lift price to the January 13 high of 10,164.
What may determine what’s next for the DAX 30? I would say it’s the outcome of tomorrow’s ECB meeting.
Economist polling is projecting a reduction of the Deposit Facility rate. But will this be enough? And will lower rates hurt banks and drag the DAX lower? At this stage it’s too early to know, but by Friday morning and once the dust has settled post the rate meeting, we should be more informed.
DAX 30 | FXCM: GER30
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