Market Forecast 07/09/2017

DAX 30 Index Forecast – Eyeing Upside To 12,450

Key Points

  • The DAX 30 index was able to move above a major resistance at 12,100.
  • There was a break above a crucial bearish trend line with resistance at 12,100 on the 4-hours chart of DAX 30 Index.
  • Today in the Euro Zone, the German Industrial Production for July 2017 was released by the Statistisches Bundesamt Deutschland.
  • The forecast was slated for a rise of 0.6%, but the actual was lower as there was no change in the production (MoM).

DAX30H4 (1)

The DAX 30 index was struggling below the 12,250 resistance this past week. In the last analysis, we saw a major resistance area near 12,170-12,200, which acted as a hurdle for the index for a long time.

However, the index was finally able to move above the 12,200 resistance. During the upside move, there was a break above a crucial bearish trend line with resistance at 12,100 on the 4-hours chart.

The index has cleared the 76.4% Fib retracement level of the last decline from the 12,334 high to 11,865 low. It means there is a high chance that the index could test the 12,335 level in the near term.

Moreover, if buyers remain in control, the index could even test the 1.236 extension of the last decline from the 12,334 high to 11,865 low at 12,444.

On the downside, the broken resistance at 12,150 and the 100 simple moving average (H4) might now act as a support and buy zone in the near term.

German Industrial Production

Today in in the Euro Zone, the German Industrial Production for July 2017 was released by the Statistisches Bundesamt Deutschland. The forecast was slated for an increase of 0.6% in the Industrial Production compared with the previous month.

However, the actual result was below the forecast as the Industrial Production posted no change in July 2017.  Looking at the yearly change, the German Industrial Production rose 4%, which was below the forecast of +4.6%.

Having said that the yearly change of 4% was a lot better than the last revised reading of +2.7%. Similarly, no change in the monthly production was far better than the last decline of 1.1%.

 

SPX 500 Index Forecast – Crucial Resistance Break?

Key Points

  • The SPX 500 Index extended its rally and was able to trade towards the 2,480 level.
  • There is a contracting triangle with resistance near 2,470 forming on the 4-hours chart of the SPX 500 Index.
  • Today, the US Initial Jobless Claims (Sep 1, 2017) will be released by the US Department of Labor, which is forecasted to increase from 236K to 241K.

SPX500H4 (1)

In the last analysis, we saw a major upside break above 2,445 for the SPX 500 Index. There were further gains and the index was able to trade close to the 2,500 level.

A high was formed at 2,481 from where a correction wave is initiated. At the moment, there is a contracting triangle with resistance near 2,470 forming on the 4-hours chart.

On the downside, the triangle support at 2,460 is very important. Moreover, the 100 hourly simple moving average is also near 2,452.

Therefore, as long as the index is above 2,450 there is a chance of buying with a break above the 2,470 resistance.

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