DAX Daily Short Setup: Targeting 19,700The DAX approached its previous high but failed to break through, signaling potential exhaustion at these levels. In response, I have initiated a short position, targeting a retracement to the 19,700 price zone.
Fundamental Insights:
1. Economic Uncertainty: Disappointing inflation data from China has sparked concerns about demand for German goods, which weighed heavily on DAX futures during the Asian session.
2. Sector Weakness: The auto sector, including Porsche, BMW, and Volkswagen, saw significant declines due to lingering tariff threats and softening demand.
3. US Jobs Report Impact: Friday’s US Jobs Report could further dictate market sentiment. A weaker report may boost expectations for rate cuts, providing temporary support to the DAX. Conversely, stronger data may reinforce bearish momentum.
4. German Economic Indicators: While November’s industrial production showed a 1.5% rise, weak factory orders suggest limited optimism. Imports fell 3.3%, signaling declining demand, further justifying a cautious short bias.
Technical Outlook:
• The DAX remains above its 50-day and 200-day EMAs, indicating bullish momentum. However, failure to sustain above 20,523 strengthens the likelihood of a retracement.
• The RSI near 59 suggests room for further downside before approaching oversold conditions.
As always, maintain disciplined risk management. Let’s see how this setup unfolds!
Note: Please remember to adjust this trade idea according to your individual trading conditions, including position size, broker-specific price variations, and any relevant external factors. Every trader’s situation is unique, so it’s crucial to tailor your approach to your own risk tolerance and market environment.
