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Dax 40 Dives as Equity Rout Widens After Fed Chair Powell Returned to Hawkish Script

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  • The Dax 40 has been caught up in the post Fed meeting melee
  • All equity markets are under pressure as the growth outlook is less bright
  • Crude is an exception today, supported by supply woes. Will the Dax find traction?

Dax 40 Dives as Equity Rout Widens After Fed Chair Powell Returned to Hawkish  Script


The Dax 40 gapped lower to start the week as the ramifications of Federal Reserve Chair Jerome Powell address on Friday left markets reeling. He stated that the central bank is focused on getting inflation back down to around 2%.

His address at the Jackson Hole symposium made it clear that the Fed expects growth to slow as a result of their tightening and that households will feel some pain in the process. The confusion around his remarks of the current rate being neutral appear to have been addressed.



The price action on Friday has created a Bearish Engulfing Candlestick and it may suggest that there could be further downside pressure emerge.

The negative gradients on the 55-, 100- and 200-day simple moving averages (SMA) may indicate bearish momentum is evolving.

Support might be at July lows of 12425 or 12367 while topside resistance could be offered at 13970.


Chart created in TradingView

--- Written by Daniel McCarthy, Strategist for DailyFX.com

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