DAX 40 & DOW JONES: weekly analysis 26th June – 30th June

<h2>Market movers</h2>
<p>The prevailing narrative still remains the one focused on central banks, after that last week the Bank of England raised interest rates by 50pbs and the Central Bank of Turkey raised by 650pbs.</p>
<p>This week we will witness an important Forum held by the ECB, in Sintra Portugal, where the main central bankers will meet to discuss monetary policies.</p>
<p>Wednesday, 28 June, will be crucial when a group composed of the Governor of the Bank of England, Andrew Bailey, the Governor of the ECB, Christine Lagarde, the Governor of the BoJ, Kazuo Ueda, and above all, the President of the Federal Reserve Jerome Powell will meet for discussions. From this meeting, much information could come out, especially regarding the next strategies of the central banks.</p>
<p>We will have the German IFO index and consumer confidence in the US on Tuesday. The German inflation data and the US quarterly GDP will be released on Thursday. Friday will be released the inflation data in Europe and the PCE data in the USA, the tool used by the FED to gauge inflation.</p>
<p>The events taking place in Russia should be monitored, as it could lead to tension in the markets.</p>
<h2>Weekly analysis and market scenarios for DAX and Dow Jones</h2>
<p>The markets closed in negative territories. Initially, we were expecting a correction during the week of the rollovers, which managed to manifest in the week that just passed. The current moment is crucial because we will need to understand if prices can go down further, until the end of the month, or if they will start a new upward movement.</p>
<p>In recent days, the Vix reached the bottom level of the year, and it is to be considered normal because stock exchanges have reached their peak levels. The Vix has not generated a bullish signal yet, while the markets are currently in a secondary bearish swing. So everything is still at stake.</p>
<p>The thesis that sees a significant peak reached within the first fifteen days of August is still in place.</p>
<p>Beyond the rhetoric of the debt ceiling, the recession, and the banking crisis, only a strong flip in sentiment could lead to a trend reversal. Earnings of US mega caps have shown off and many other companies are also ramping up the increase in revenue.</p>
<p>The average annual returns on international equities (World Stock Exchanges based on GDP) are around 11%. Current rates in America are more than 5%. With a projection for 10, 15, and 20 years, equity markets always beat bond markets. Therefore, we should be at the starting point of a 10-year bull market.</p>
<p>Rising interest rates won’t directly and inevitably lead to a recession. As long as these hikes are balanced with economic growth, there should be no danger. On the other hand, an exaggerated rate cut could drag down the markets for a long time.</p>
<p>The likely lows in October 2022 will have a high probability of remaining so for many years. They could represent the lows of the entire decade. Right now, despite some short-term overbought, the markets are unstoppable and will be so for a long time. Here is why.</p>
<p>We have highlighted several times that stock prices tend to move at least 6/9 months before the economic cycle. For this reason, during the final part of 2022, the markets would have posted a significant bottom between June and October and then taken off again for the long term. The prices marked during the year had discounted the most unfavorable geopolitical and geo-economic conditions.</p>
<p>During 2023 we expect the following pattern to emerge: the low should be posted in January or during Q1 2023, and the high during Q4. Average market returns up to 20-25%.</p>
<p>As always, we will confirm the annual forecast from time to time.</p>
<p>Last week the S&amp;P500 index posted a drawdown, reaching support at 4385.</p>
<p>Confirmed 4368-4355, which keeps holding the weekly support. Below it, downward accelerations are possible, with the first target in the 4304 mark. Confirmed the 4274-4263, and if these levels are to be trespassed it will bring a downward acceleration toward 4249 then 4227-4223 the whole zone where volumes managed to concentrate in recent weeks.</p>
<p>Below 4223, there are high chances for further drawdowns targeting the supports at 4204 and 4196-4190. 4177-4170 becomes a new critical mark.</p>
<p>Confirmed the supports in 4153, 4144-4140, 4124-4117, and 4100 areas. The loss of the latter support could lead to heavy drawdowns.</p>
<p>Confirmed supports in areas 3930-3905-3899, 3945-3957-3961, 3979, 3993-4000, 4032-4043. 4064-4075 is still the key mark for support levels.</p>
<p>3890-3879 is still a critical zone because, in this specific area, buyers managed to concentrate. Additional support in 3864-3857 areas. Another intermediate zone is located in the 3822-3814 area.</p>
<p>Support in the 3808-3798 zone was confirmed, below which prices could start a new downward spiral.</p>
<p>Confirmed supports in 3669, 3680-3689-3701, 3711-3726-3733 zones.</p>
<p>3762 and 3711 are the monthly levels that support the current uptrend, so beware of any breakout of these levels: we could witness a new trend inversion.</p>
<p>The psychological support of 3600 remains crucial. Support around 3644-3651 marks has halted the fall and is now the monthly support after this solid uptrend. It shouldn’t be touched again, to avoid new and heavy downward movements. Below is the 3607 level. Then again, the 3557-3547, 3538-3524, and 3514-3507 are support levels. The 3485 support is now the annual, critical, and historical level for the S&amp;P500 index. We will monitor whether this last level could stop, at least in the medium term, the bearish direction of the markets. Should we go beyond it, 3200-3300 will be the target, sought after by funds, investors, and traders halfway around the world.<br />
New resistances are placed in 4386-4395-4405 areas; from these areas, the price could accelerate upwards, reaching the next resistances in areas 4439 and 4453. Weekly resistance is located in 4467-4484 areas.</p>
<p>The 4506 and 4554 are the resistance levels to be broken to see the downtrend that began in April 2022 reversed. The 4580-4590 is the area to overcome to break down the monthly resistance placed in the 4613 area.</p>
<p>A weekly closure above 4613 may guarantee a reversal of the annual trend if confirmed every month; the next targets remain 4717 and 4780.</p>
<p>How to move? We will have to monitor what will happen over Monday and Tuesday, and then oversee the set-up placed for the 30th of June. The markets should continue to move upward. We will monitor the weekly supports; if there are no sustained reversals on a multi-day basis, the weekly trend will remain bullishly biased.</p>
<h2><img decoding="async" loading="lazy" class="alignnone wp-image-23882 size-full" style="font-size: 16px;" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/06/Untitled-design-33.png" alt="" width="1916" height="840" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/06/Untitled-design-33.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/06/Untitled-design-33-300×132.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/06/Untitled-design-33-1024×449.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/06/Untitled-design-33-768×337.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/06/Untitled-design-33-1536×673.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></h2>
<p><strong>DE40</strong> – Last week, the German index posted a strong downward movement, thanks to the negative data of the underlying economy, which is revealing a worse recession than initially expected. After breaking the resistance at 16320-408, the prices closed the week on the support located at 15803-746.</p>
<p>15746-733 are well confirmed. Confirmed the weekly support placed in 15733-687 area. Support zones 15657-603, 15652, and 15538-510 confirmed. Below the latter level, prices can create a robust downward acceleration. On the other hand, if those levels won’t trespass, we could witness an important restoration in price levels.</p>
<p>Supports in areas 15439, 15368-308, and 15287-247 are well confirmed. Followed closely by 15152-196, 15247-287, and 15308-368. These zones represent the strength of the ongoing rally and must be held for it to continue the movement.</p>
<p>Support in areas 14957-14844 and 14737-603 are confirmed. This area becomes the weekly level for new upward movements or heavy drawdowns.</p>
<p>Confirmed intermediate supports: 14138-184, 14342, 14414-545.</p>
<p>New critical zone in the 13814-781 area. The loss of the volumetric zone 14069-13974 opens the way to monthly support in the 13621 area.</p>
<p>Monthly support in the 13621 area. The Dax left a huge volumetric gap after the FED’s inflation figures, easily penetrated at the loss of 13975.</p>
<p>Solid supports in the 13692-608, 13550-516, and 13457-410 areas. Confirmed support is around 13314-333, 13331-410, and 13438-467.</p>
<p>Confirmed volumetric supports in areas 12865, 12833-12909, 12978-13038, 13113-178, 13222-280, 13307-357.</p>
<p>Support in the 12808-766 area is confirmed. From 12628 to 12766, there are a series of intermediate supports, helpful for long entry from pullbacks. 12566 becomes monthly support.</p>
<p>Other key supports are 12407-517 for volume concentration and 12353-275, the first bullish turn zone. Confirmed supports in the 12223 and 12136 areas.</p>
<p>It was also confirmed support in the 19920-15006 area. This is 11875-11950-12024, which halted the price fall after the US CPI data on Oct 13th. Losing it would mean new bearish pressures and a touch of the weekly support in the 11766 area; extensions to 11650 and 11542 below it. The 11095 mark could be a target in case of a massive sell-off. These levels can be considered annual reversal points.</p>
<p>New resistance zones in 15791-886 areas. This area should be recovered to have a tiny possibility of a bullish restoration. Next resistances in 15962-16034 and 16072-16163 areas which become weekly levels. Other resistances in the 16230-280 and 16320-408 areas are confirmed. The break of 16408 would open up further rises toward the final annual target located in the 16500 area. Beyond this, we could witness an attack on the 16700-17000 area.</p>
<p>If by the following Friday, prices will remain above 16163, we could witness a chance for a continuation of a bullish movement on a monthly basis; below 15791, the trend will move strongly downwards again.</p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-23885 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/06/Untitled-design-34.png" alt="" width="1916" height="840" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/06/Untitled-design-34.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/06/Untitled-design-34-300×132.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/06/Untitled-design-34-1024×449.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/06/Untitled-design-34-768×337.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/06/Untitled-design-34-1536×673.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></p>
<p><strong>US30</strong> – After reaching the 34607-706 area, one of our monthly targets, the Dow Jones index veered strongly downwards for the whole week, easing down on the weekly support in the 33712-660 area.</p>
<p>Confirmed 33712-660 and 33559-434 represent the weekly supports. The break of these levels could lead to a strong movement to the downside. Other supports in 33305, 33216-039, and 32975-858 areas. This whole zone is the new weekly support. Underneath, it will be possible to witness new bearish accelerations. Other supports in the 32804 and 32725 areas.</p>
<p>Additional supports in the following areas: 32499-632, the loss of which could lead to monthly trend reversals. Next supports: 32801-875, 33945-990.</p>
<p>Confirmed supports are placed in two well-bought areas: 31197-497 and 31536-764. Other support areas are placed at 31753-920, 32111. The 31861 level still remains a key one.</p>
<p>31036-31125 is critical support for the monthly level. Confirmed 30953-815, 30715-614, 30559-381, 30253-136, and 29696-29906.</p>
<p>The 29485 mark remains a critical one. In addition to the 29619-529 and 29338-29264, the support zones 29159-28876 and 28800-28685 are again confirmed. These are all excellent supports to look for long entry opportunities from pullbacks. Should they all be pierced to the downside, prices could move toward 28319, 28051, 27765, and 27019 in extension.</p>
<p>New resistance zone in the 33723-890, 34030-271, and 34314-356 areas. The latter one is the weekly resistance. Other resistance in the 34432 area and 34607-706 are confirmed. The next targets to be reached are 34801-34950 and the break of 35000 points.</p>
<p>Monthly positioning above 35599-963 could offer a new bullish direction; 35157 and 35614 areas are significant because they may lead to either direction extensions. Monitoring this whole price area is extremely important.</p>
<p>A move through 36529 and holding that level would allow seeing area 37000 if prices forcefully break the last resistance placed at area 36786. Above 36236, we maintain the option of further bullish volumetric thrusts.</p>
<p><strong>IMPORTANT NOTE:</strong> Last week’s excessive pace led to the necessary adjustments with the purpose of loading up new purchase lots. Do not let our guard down for now, but if the weekly supports manage to hold up, there will never be a reversal trend, however, vertical thrusts still have a chance to manifest.</p>
<p>Also, this week, it’s a good idea to note the openings on Monday and the closings on Friday, to confirm or deny the current trend. Avoid overtrading and watch out for the volatility imprinted by HFTs. Mark any gaps that may also appear during the week, paying particular attention to those on Mondays.</p>
<p>Happy trading!</p>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/dax-40-dow-jones-weekly-analysis-16th-june-30th-june-23892/">DAX 40 & DOW JONES: weekly analysis 26th June – 30th June</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>