Germany 40 (DAX) rejects resistance as Fed rate hike bets rise
Dax 40 rejected by Fibonacci resistance as prices fall back towards long-term psychological support holding at 12,000 and hot US Inflation buoys further dollar strength as rate expectations 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.
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