Analysts at Legacy FX take a look at two key markets: The Dow Jones Industrial Average (US 30) and the DAX 40 in Germany. With the aid of chars and technical analysis, the firm provide guidance as to the events which may cause changes to market sentiment.
Dow Jones Industrial Average (US30)
The rebound from the March 2022 low has lost momentum over the past week and the index has been trading sideways fluctuating between 34,212 and 34,837.
The 4H RSI indicator has shifted to its bull market range, suggesting that internal momentum has improved, and that higher levels are likely to unfold in the near-term. A break above minor resistance of 34,837 is highly likely and would signal an extension of the recent rally to 35,350.
Investors are awaiting key data releases from the U.S. this week with GDP QoQ (Q4) on Wednesday expected to rise to 7.1% from 2.3%. On Thursday the focus would be on Personal Income and Spending and PCE Price Index YoY for February expected to rise from 6.1% to 6.5%.
The monthly Non Farm Payroll for March is due on Friday, with consensus expectations for 475K new jobs added and forecasts at 460K, below the 678K jobs created in February.
DAX 40 (GERMAN40)
The rebound from the March 2022 low has lost momentum over the past week and the index has been trading sideways fluctuating between 14,117 and 14,596. The 4H RSI indicator has improved and is above its 40% bull market support.
This suggests that internal momentum is strong and higher levels are likely to unfold in the near-term.
A break above minor resistance of 14,596 is likely in our view, which could trigger an extension of the recent rally to its medium-term down trend line crossing at 14,950. A break above the medium-term down trend line would be very encouraging development and would suggest that higher price levels are ahead.