Two trades to watch: Dax, WTI oil

Dax rises as fears ease over Fed tapering, German GDP upwardly revised. WTI oil tests 50 sma resistance after 5% gains on Monday.


Dax rises, German GDP beats forecasts 

The Dax along with European peers is heading higher, extending gains from the previous session amid an upbeat mood in the market as concerns over the Fed tapering support ease. 

The German economy grew faster than expected in the second quarter, GDP printed at 1.6% QoQ, vs 1.5% forecast. Annually GDP rose to 9.4% up from 9.2% initially estimated. 

The upbeat data comes following weaker than forecast manufacturing PMI for August.  

Learn more about the Dax 

Where next for Dax? 

The Dax bounced off its 50 sma on the daily chart last week and is extending gains towards 16000 and fresh all-time highs with the bulls in the driving seats.  

The RSI is pointing northwards and in bullish territory so supportive of further gains. However, beware for the RSI bearish divergence which suggests that momentum could be running out of steam. 

Strong support can be seen at 15650 the 50 sma which has been a solid support across this year. A break below there could bring 15500 the 100 sma into focus, a break below here could negate the near-term uptrend. 


Oil extends rally after 5% gains on Monday 

Oil continues to push higher extending a 5% rally on Monday after the US approved the first full approval for a COVID vaccine.  

The BioNTech/Pfizer vaccine has received full approval by the FDA, after gaining emergency use clearance in December. 

Vaccination rates are expected to get a lift from the move after hesitancy across some areas of society, boosting optimism of higher demand. 

Elsewhere India’s demand rose to a 3-month high, whilst demand in Asia as a whole remains depressed as the Delta variant spreads. 

Adding to the upbeat mood surrounding oil, inventories likely declined last week. API stockpile data is due later. 

Learn more about oil 

Where next for oil prices? 

Crude oil is extending its gains, attempting to push above its 50 sma on the 4-hour chart and the descending trendline dating back to early July. 

The bullish MACD combined with the breakout suggests that there could be more upside to come. 

Bulls are looking to wards 69.40 the horizontal resistance and the 200 sma. Beyond here $70.00 the round number becomes the new target. 

On the flip side, failure to break meaningfully above 65.80 the 50 sma, 65.00 August 9 low and 64.00 August 20 high could offer some support ahead of 61.50 the August low. 

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