Theresa May calls for a snap election in June, which has divided opinions here in the UK, some believe it’s a great way to strengthen her mandate and press on with the Brexit negotiations as an elected leader as the UK look to a ‘grown-up’ politician who has what it takes to get through the mess. Others think it’s her going back on her word, showing that she has no idea what she’s doing and it’s going to waste time from the already pressing deadline to complete the required negotiations in the two-year timescale since signing article 50. Ignoring all that, it’s caused some volatility in the GBP pairs, leading some to believe that GBPUSD will reach 1.30.
It’s the same story: geopolitical worries, weak US economic data and uncertainties surrounding the upcoming elections in France are weighing on the stock exchange. A possible delay in the tax cuts by US President Donald Trump hit Wall Street on Tuesday, but is it just another executive order that ultimately becomes a yawn. So bulls are under pressure at the moment.
Yesterday was a heavily bearish day, catching out a number of buyers by providing some technicals signals to buy, but continuing to move lower. It appeared as though the daily S2 was a level that could hold, which was just above the 12k, but it was taken out late afternoon, before recovering and settling just below at 11994 to post a loss of 0.78% on the day.
Bearish targets include 11875, watch a reaction at 12075 to see if this becomes resistance. This comes after we broke below the 12054 fibonacci level. Price is currently at the bottom of a bearish trend channel, so better opportunities could come selling at higher prices. 12,000 is a strong level of support
Bullish targets include the All Time High, being mindful of what happened in 2015 when traders were entering blindly expecting further gains and got burned. We are still technically (longer term) bullish above 11875, so watch those levels.
Dax Support & Resistance
|14 Day ATR||117.34|
|200 Day EMA||11263|