DAX Outlook Remains Bullish While Above 15,200

DAX outlook is still bullish while above 15,200 points. The German index keeps the higher lows series intact after a ranging trading week.

European equity markets opened higher on the last trading day of the week. The German DAX recovered from yesterday’s lows and is up 0.65%, holding its bullish bias.

In the United Kingdom, the poor economic data released this morning failed to impress the FTSE 100. The index is up 0.32%, although the construction output, industrial production, and manufacturing production missed expectations.

The story of the trading week comes from the commodity markets. Namely, the WTI crude oil price finally corrected from its highs. After trading close to the $77 mark, the price of oil found support below $71, triggering some weakness on commodity currencies, such as the Canadian dollar. The price of oil and the Canadian dollar have a direct correlation, often more important for the dollar than the Canadian economic data.

Gold made it back above $1,800. The move higher came in the context of falling US 10-year yields after the FOMC minutes last Wednesday. The yields and the price of gold have an inverse correlation, and so gold found an ally in the falling yields/rising bond prices.

Silver moved in a tight correlation the entire week, unable to break resistance above $27. At present, it is down half a percentage point, trading at $25.83.

In the United States, the equity market had a mixed week. Monday saw no trading because of the bank holiday, and Tuesday’s trading activity was shaped by the FOMC minutes to be disclosed the following day. The sentiment in the market was that the Fed would use the occasion to announce the tapering of its asset purchases. It ultimately did not, so share action was driven by the commodity markets and US 10-year yield performance.

The US dollar was strong against the Canadian dollar but lost ground against the Japanese yen and remained flat against the euro.

Weekly Analysis

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Disclaimer: None of the content in this article should be viewed as investment advice or a recommendation to buy or sell. Past performance/statistics may not necessarily reflect future ...

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