Global macro overview for 31/03/2016:
The German inflation data unexpectedly turned positive in March. It might be a first sign that domestic demand as well as the ECB massive stimulus may be starting to boost price gains. On an annual basis, the German CPI rose 0.3%, exceeding forecast for a 0.1% gain and following zero growth in February. The inflation might start to pick up at last and according to the ECB projections from March inflation in the region would accelerate to 1.3% in 2017 and 1.6 % in 2018. In conclusion, the extended period of the QE program and recent increase of the asset purchase facility by the ECB might finally be working towards the projected inflation levels.
Let's now take a look at the technical picture of the German index DAX30 (ETF) in the daily time frame. We can see the index is trading below the long-term trend line and below the 100 and 200 daily moving average. Moreover, the rising wedge formation has just hit the technical resistance at the level of 10124. This level looks like the line in sand for bears now, because any rally higher would lead to the test of the golden trend line. So, if bears want to take back the control over this market again, now is a good time and price level to do it.
