Current trend

The leading index of the Frankfurt Stock Exchange DAX 40 shows ambiguous trading dynamics during the Asian session on August 22, consolidating near 18450.0 and highs of the beginning of August. Activity on the instrument is declining in anticipation of monetary policy decisions by the American and European regulators.

Markets focused on the speeches of representatives of the world’s central banks as part of the annual Economic Symposium in Jackson Hole. Traders will focus on the US Fed Chairman Jerome Powell’s speech. He may touch on plans for the upcoming interest rate cut during the September meeting. Options for reducing the interest rate by 25 basis points or 50 basis points are considered, and markets expect two or three revisions of the parameters before the end of the calendar year. In turn, the European Central Bank (ECB) may also conduct at least two additional reductions in borrowing costs by 25 basis points each. However, the department’s officials are inclined to take a wait-and-see attitude and prefer to wait for actions from their American colleagues.

Today, traders pay attention to business activity. The EU manufacturing PMI will fall from 45.8 points to 45.6 points at the end of August, while the services PMI sector rose from 51.9 to 53.3 points. In turn, German indicators adjusted from 43.2 points to 42.1 points and from 52.5 points to 51.4 points, respectively.

Support and resistance

On the daily chart, Bollinger shows confident growth: the price range is expanding, remaining quite spacious for the current market activity level. MACD maintains a strong buy signal, located above the signal line. Stochastic retreated from the highs and developed a downward trend, signaling in favor of a full-fledged downward trend in the ultra-short term.

Resistance levels: 18500.0, 18600.0, 18700.0, 18800.0.

Support levels: 18400.0, 18300.0, 18200.0, 18091.9.

Trading tips

Long positions may be opened after a breakout of 18500.0, with the target at 18700.0. Stop loss – 18400.0. Implementation period: 1–2 days.

Short positions may be opened from 18500.0 as a resistance level with a breakdown of 18400.0, with the target at 18200.0. Stop loss – 18500.0.