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DAX rises as sentiment improves. Oil rises over the 200 DMA, supported by a weaker USD.
 

DAX rises as sentiment improves

The DAX, along with its European peers, is rising at the start of the week as aggressive Fed hiking bets easy and after the PBoC pledges more support to the economy.

The mood is expected to remain cautious in Europe ahead of eurozone inflation data and the ECB rate decision later in the week.

Attention will also be on the Nord Stream 1 gas pipeline, which is expected to go back online this week after ten days of repairs. Nerves are growing as to whether they will turn the gas supply back on. Failure to do so could see Germany head quickly into recession.

The economic calendar is quiet today.
 

Where next for the DAX?

The DAX has been struggling at around the 2022 low since the beginning of the month. The price is rebounding from 12400, the 2022 low.

The price is attempting to re-take the 20 sma, which, combined with the bullish crossover on the MACD, is keeping buyers hopeful of further gains.

Buyers will need to retake resistance at 13430, the late June high, exposing the 50 sma at 13590 to create a higher high.

On the flip side, sellers need to break below 12400 to create a lower low and head towards 12000.

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Oil rises over 200 DMA supported by a weaker USD

Oil fell over 6% last week as recession fears, and rising COVID cases in China hurt the demand outlook. Oil has fallen over 20% from its June high as it heads into the bear market territory.

Today oil prices are rising, boosted by the weaker USD and the prospect of further economic support in China.

Biden’s landmark visit to Saudi Arabia last week wrapped up without a firm commitment to boost crude oil supplies.

The next OPEC+ meeting is due on August 3^rd and will be watched closely as the current agreement to ramp up production ends.
 

Where next for oil prices?

Oil prices fell to a 4-month low of 88.50 and rebounded higher at the start of the week. The rise above the 200 DMA, combined with the receding bearish bias on the MACD, keeps buyers hopeful of further upside.

Buyers will look for a move over $100 psychological level ahead of 104.00, the July 7 high. A move over here would create a higher high.

Meanwhile, sellers will look for a move below the 200 DMA at 93.50 to extend the selloff to 92.00, the April low, and 88.50, the July low. A move below here is needed to extend the bearish trend and open the door to 85.60.

(Click on image to enlarge)

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