Two trades to watch: DAX, US Dollar Index

Dax edges higher as sentiment is boosted by dovish Fed and strong Apple & Facebook earnings. US Dollar Index is downed by the Fed and trades around 9 week low.

Charts (1)

DAX edges higher on upbeat sentiment

Dax is extending gains as the market reacts positively to a supportive Fed and Biden stimulus push overnight. 

Strong earnings from Apple & Facebook add to the upbeat mood in the market.

Attention will now turn to earning which continue to pour in in Europe in addition to German unemployment data which is expected to hold steady at 6%.  

German CPI for April is expected at 0.5% MoM and 1.9% YoY 

Where next for the German Dax? 

The Dax pushed above the upper band of the multi-month ascending channel in early April and continues to hold above it, although momentum has slowed considerably. 

The Dax trades just above its 50 & 100 SMA on the 4 hour chart and the bullish MACD keeps the buyers hopeful. 

Bulls need a move above 15370, in order to put a fresh attempt on the all time high of 15515 and further gains. 

On the flip side, sellers will be looking for a break below 15150 for a deeper selloff. 

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US Dollar Index at 9 week low post Fed, Biden 

The US Dollar Index is holding steady after falling 0.4% in the previous session. 

The marketr reacted well to a dovish Fed and Biden urged Congress  to back his stimulus package. 

Attention will now turn to the data deluge with the preliminary Q1 GDP reading expected to be the most closely watched. US Q1 GDP is show 6.5% annualized growth, up from 4.3% in Q4 2020. 

Initial jobless claims are expected steady at 549k in line with last week’s post pandemic low 

What is the US Dollar Index?

Where next for US Dollar Index? 

The US Dollar Index trades below its descending trendline dating back to the start of the month. It trades below its 50 & 100 SMA on the daily chart, falling through the latter earlier this week. The MACD is also bearish. 

Immediate support can be seen at today’s low 90.40, beyond here the sellers could look to break down ascending trendline support dating back to early January at 90.25 ahead of the 90.00 the round number. A clearance here could bring the year to date low of 89.20 into focus. 

On the upside, the confluence of the descending trendline support and the 100 SMA could prove a tough nut to crack at 91.00 ahead of resistance at 91.6 the 50 SMA. 

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