Two trades to watch: DAX, WTI oil

DAX rises as risk sentiment rises, German ZEW economic sentiment data due. Oil extends rebound as Omicron fears ease, API data due.

Germany

DAX rises as risk sentiment rises, German ZEW economic sentiment data due

The DAX, along with other European peers, is extending gains for a second straight day as Omicron fears continue to ease.

German industrial production unexpectedly rebounded in October rising 2.8% MoM, after falling 1.1% in Sept.

The data is in contrast to yesterday’s German factory orders which plunged -6.9%.

The data keeps on coming today in the Eurozone with unemployment, GDP data and German ZEW economic sentiment data.

German economic sentiment is expected to fall sharply to 5, down from 12.5 as rising costs, ongoing supply chain bottlenecks and rising COVID cases hurt sentiment.

 

Learn more about the DAX

Where next for the DAX?

The DAX is extending its rebound from 14917. The rebound had been capped by the 200 sma and the three-week descending trendline. However. the price is attempting a break above here at the time of writing. The RSI is heading towards 50 – neutral territory, rebounding from oversold conditions

A move above here could negate the near-term downtrend and expose the 50 sma at 15631, ahead 16000 round number and 16031 the August high.

Failure to hold above the 200 sma could see the Dax test 15175 yesterday’s low before looking back towards 15000 round number.

DAX chart

Oil extends rebound as Omicron fears ease, API data due

Oil prices continue to rise on Tuesday after jumping 5% in the previous session.

Easing fears over Omicron, as hospitalizations remain low and symptoms appear mild have calmed concerns of further lockdowns, helping the oil demand outlook.

Omicron fears had sent oil prices tumbling last week, the same week that OPEC decided to press ahead with its planned increase of 400,000 barrels a day.

Indirect talks between Iran and the US over the nuclear deal have stalled, adding to the upbeat picture for oil.

API inventory data will be in focus.

Learn more about trading oil

Where next for crude oil?

After booking its biggest one day jump since August, WTI oil is trading a further 1% higher. 

The receding bearish bias on the MACD combined with a move over 70.00 200 sma and psychological level are keeping buyers hopeful.

Bulls need a close above 70.00 in order to look ahead towards 72.80 the November 29 high and 74.80 November 22 low.

Failure to hold above 70.00 could see 69.00 yesterday’s high tested. A break below here could see 65.40 Friday’s low come into play.

Oil chart  

  

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