Two trades to watch: DAX, WTI oil

Dax rises as mood improves on easing energy prices, US debt talks. Oil extends selloff as inventories unexpectedly rise.

Dax rises as mood improves on easing energy prices, US debt talks

The DAX along with its European peers are looking to a higher start following a positive finish on Wall Street.

Oil prices, which has been a major factor in fueling inflationary concerns this week have eased slightly and news that in Washington they could be nearing an agreement on the debt ceiling is also lifting the mood in the market

German industrial production declined 4% MoM in August after rising 1.3% in July. Expectations were for a -0.4% decline.

This comes following German factory orders which slumped -7.7% MoM in August

Minutes to the ECB meeting are due later.

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Where next for the DAX?

The selloff in the Dax yesterday saw the price test 14810 the May low, before rebounding higher. The price managed a close above the 200 sma at 15060 keeping the buyers hopeful and which now provides a key support.

A close below the 200 sma and then 14810 could open the door to the next level of support at 14420.

Any recovery would need to retake 15300 the weekly high to attack 15470. A move above here could expose the 50 sma and falling trendline support at 15660 and see the bulls gain momentum.

DAX chart

Oil extends selloff as inventories unexpectedly rise

US crude oil prices slumped almost 2% overnight after EIA data revealed an unexpected rise in crude oil inventories. Stockpiles rose 2.34 million barrels across the week, expectations had been for a draw in the region of half a million barrels.

Separately US Energy Secretary Jennifer Granholm reportedly presented several options to slow

OPEC remains bullish on the demand outlook but failed to raise production on Monday beyond the already planned 400k per day.

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Where next for WTI crude oil?

US crude oil is extending losses from the previous session. After hitting a fresh 7 year high of 79.53, the price dropped taking the RSI out of overbought conditions. The price remains within the rising channel dated back to August 23.

Immediate support can be seen at 76.60 the July 6 high. A break below here is needed to attack 75.00 resistance turned support from the July 13 high. This could open the door to 74.00 the lower band of the rising channel and horizontal support from the August high.

Any recovery would need to retake 78.22 Monday’s high in order to look towards 79.53 and 80.00 the round number.

oil chart


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