DAX: Anticipating a Healthy Retracement Amid Weak Eurozone Data
Updated
The DAX is showing signs of losing momentum after three consecutive bullish days, despite making new highs. Technically, it’s time for a healthy retracement towards the 19,100 zone to provide a solid base for continued bullish action. I plan to take advantage of the pullback, profiting from the downside move. If the price spikes and hits the stop loss, I will reenter the trade once the setup confirms itself again.
Technical Analysis:
• The 4H chart suggests that the market is struggling to maintain bullish momentum after the recent highs.
• A retracement towards 19,200 is expected, aligning with key support and Fibonacci levels, which would signal a healthier continuation of the uptrend.
• The price action appears to be in need of consolidation before further bullish progression.
Fundamental Analysis:
On the fundamental side, the Eurozone economy continues to struggle, as reflected in the recent PMI data. Manufacturing PMI figures across Europe are underwhelming, with most of the key economies showing contraction or slower growth:
• Spanish PMI (53.0) exceeded expectations, but other economies, such as Italy (48.3) and France (44.6), show weaker performance.
• The overall sentiment in the Eurozone remains fragile, which may further support the case for a pullback in the DAX index before any sustained bullish moves.
Given the technical and fundamental outlook, I’m positioning for a retracement in the DAX, expecting a drop to 19,100. If the trade does not play out and spikes toward my stop loss, I’ll be prepared to reenter once conditions align again. It’s essential to stay patient and trust the setup.
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.
Technical Analysis:
• The 4H chart suggests that the market is struggling to maintain bullish momentum after the recent highs.
• A retracement towards 19,200 is expected, aligning with key support and Fibonacci levels, which would signal a healthier continuation of the uptrend.
• The price action appears to be in need of consolidation before further bullish progression.
Fundamental Analysis:
On the fundamental side, the Eurozone economy continues to struggle, as reflected in the recent PMI data. Manufacturing PMI figures across Europe are underwhelming, with most of the key economies showing contraction or slower growth:
• Spanish PMI (53.0) exceeded expectations, but other economies, such as Italy (48.3) and France (44.6), show weaker performance.
• The overall sentiment in the Eurozone remains fragile, which may further support the case for a pullback in the DAX index before any sustained bullish moves.
Given the technical and fundamental outlook, I’m positioning for a retracement in the DAX, expecting a drop to 19,100. If the trade does not play out and spikes toward my stop loss, I’ll be prepared to reenter once conditions align again. It’s essential to stay patient and trust the setup.
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.
Trade active
The trade is currently at 1% profit. I’ve decided to reduce risk by taking partial profits and will continue to monitor it closely. There’s potential for a selloff today, so I’ll remain vigilant with my risk management.Trade closed: target reached
The trade reached the target as expected, marking a smooth and well-managed process. Congratulations to all traders who followed along! Enjoy the rest of your trading week, and remember to keep managing risk wisely.
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