DAX rises, German factory orders unexpectedly jump. EUR/USD hovers at €1.1870 with US closed for public holiday.

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German Dax advances, factory order unexpectedly rise 

The Dax (DAX) along with its European peers is expected to rise on the open as investors continue digesting the weaker than forecast US non farm payrolls and as they look ahead to the ECB meeting later this week.

German Factory orders jumped 3.4% MoM in July, after surging 4.1% in June. Expectations had been for orders to fall 1%. The data suggests that the European powerhouse is gaining momentum. Although this reading comes following disappointing numbers from Germany and the Eurozone as a whole last week.

Where next for the Dax? 

The Dax once again found support on the 50 sma last week around 15700. This respect of this support coupled with a turn higher ion the RSI is keeping buyers optimistic. However, 16000 continues to offer strong resistance. Any move higher would need to break this resistance in order to reach new all-time highs. 

On the flip side, should the Dax fall below the 50 sma then a move below 15400 would be needed to reverse the current uptrend and for sellers to gain traction. This could open the door to the July low of 15000.  

EUR/USD hovers around 1.1870 as USD stabilizes

EUR/USD (FXE) is edging mildly lower at the start of the week after briefly pushing above 1.19 on Friday following the much weaker than expected US NFP report.  

The focus is on the ECB this week with the taper question under the spotlight. The Euro found support last week from hawkish ECB policy makers despite weaker data. 

Today German factory orders unexpectedly rose in July 

The pair could see a relatively quiet start to the week amid a US public holiday. 

Where next for EUR/USD? 

EUR/USD broke out of the descending wedge formation in the last week of August reversing higher to of 1.1909 a level which also capped gains at the start of the month.  

Whilst the RSI is in bullish territory it is pointing lower. Any move higher would need to break above 1.1909 in order tyo attack key resistance between 1.1975 the July 25 high to 1.20 the round number and 200 sma. 

On the flip side, support is seen at 1.1840 the ascending trendline support ahead of 1.1800 the 50 sma ahead of 1.1750 the mid to late July low.