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DAX falls after Russian announces a 3-day gas halt. GBP/USD falls toward its 2022 low.
 

DAX falls as Russia announces gas supply halt

After shedding 1.8% last week, the DAX is set to fall again on the open as fears of a recession mount.

Last week concerns over rising inflation, the ongoing energy crisis, and fears of a recession pulled German stocks off a two-month high.

Over the weekend, Russia announced that it would halt gas flow along the Nord Stream 1 pipeline for three days at the end of August. The move will intensify the energy crisis in the region, as gas prices rise toward a 5-month high.

German PPI jumped 5.3% the fastest rise on record. Rising gas prices suggest that inflation is unlikely to cool soon.

There is no high-impacting German data today, leaving sentiment in the driving seat ahead of PMI data tomorrow.
 

Where next for the DAX?

The DAX rebounded from 12400, the mid-July high, before running into resistance at 14000 last week, a two-month high.

The price has since fallen below the 20 sma, which, combined with the bearish crossover on the MACD, keeps sellers hopeful of further losses.

Sellers will look to break below the 50 sma at 13265, opening the door to 13000, the psychological level, before bringing 12400 back into focus.

On the flip side, a rise above the 20 sma at 13590 could see the index rise back up towards 14000 and create a higher high.

(Click on image to enlarge)

GBP/USD falls towards 2022 low

GBP/USD fell 2.5% across the previous week as inflation rose to 10.1%, intensifying the cost-of-living crisis, and as consumer confidence plunged and retail sales fell by more than expected.

Inflation remains a concern as the new week begins. An 8-day strike at Felixstowe, the UK’s largest container port, could fuel supply chain issues and lift inflation higher.

Meanwhile, the USD gained last week as the Fed made it clear that there was still plenty of work to be done, with more hikes expected. Upbeat jobless claims helped boost optimism that the US could avoid a deep economic downturn.

Today the USD is on the front foot as investors look ahead to a speech by Fed Powell at the Jackson Hole Symposium, where he could give more clues as to how high-interest rates will go.
 

Where next for GBP/USD?

GBP/USD has been trending lower since late February, hitting a 2022 low of 1.1760 in mid-July. The pair rebounded from this level before running ingto resistance at 1.2280. After a second attempt to break 1.2280, the price rebounded lower, breaking below the 20 & 50 sma and the multi-month falling trendline. This, combined with the bearish RSI, keeps sellers hopeful of further downside.

A break below 1.1760, the 2022 low opens the door to a 1.17 round number.

On the flipside, resistance can be seen at 1.1925, the falling trendline resistance ahead of 1.2090 the 20 & 50 sma.

(Click on image to enlarge)

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