Fundamentals:
Friday was an interesting day both in political and financial aspects. May – Trump meeting caused a volatility in the markets.
Highlights:
- Trump denied he criticized British prime minister after criticizing her (CNN)
- Both countries would not allow Iran to nuclearize
- No matter what the Brexit plan is, he finds Theresa May successful.
- Trade agreements between UK and US will continue.
- Trump stated that “he will not let the trade between the Eurozone and US continue as it was before.”
It looks like his new “enemy” is the Eurozone Countries. In other words, Germany.
Technicals:
We see a potential Head and Shoulder pattern forming in the bigger picture. 11.750 support is critical.
The smaller part of the picture is not positive either. DAX ended the week below EMA 50, 100 and 200 on the daily chart. The neckline of the double top has been retested. However, it failed to break and close above. 12540 support is important. Breakout of this support will trigger the bearish price action.
Break below 12540 will carry the price 12450, 12400 and 12200. The target of the formation is 12000.
The real game may start with the completion of the SHS pattern and the breakout of the 11750. It is out of our focus for a while but will keep an eye on it.
