Germany 40 (DAX) rejects resistance as Fed rate hike bets rise

Dax futures have fallen back towards 12,000 after another heated US inflation print raised expectations of more aggressive rate hikes for the foreseeable future. With both the US inflation rate (YoY) and Core CPI beating estimates, the Federal Reserve remains a key catalyst for global markets.

In response to the data release, German equities reacted almost instantaneously, driving DAX 40 lower. With prices falling just below the 12,400 handle earlier today, Dax futures did a major U-turn at resistance before finding support back above 12,000.

DAX 40 (Futures) hourly chart

For the bullish move to gain traction, a hold above 12,133 (50% Fibonacci of the 2020 move) and above the 100-month MA (moving average) at around 12,190 could drive prices back towards the April 2015 high at 12,430.

A move higher brings 12,443 (the 23.6% retracement) and 12,600 as the next key zones of resistance.

Dax 40 (Futures) daily chart

On the contrary, a break of 11,900 could drive price action towards the June low of 11,829 opening the door for 11,718 (February low). If both levels, then it is possible that Dax 40 may continue towards the 38.2% retracement of the 2020 move at 11,558.

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.