DAX fut. – sell limit at 10213.8
Stop loss: 10545
Take profit: 9600
DAX index collapsed on Monday after Chinese disaster took its toll and even though the fundamentals are still pretty for German index the very problem concerning China has not been dealt with, therefore the space for potential further decline exists. The upward correction stopped almost precisely on 50% retracement of last bullish wave (start in October 2014) however it might reach the 50% re-tracement of the last bearish wave as well. What is more, the recent bearish gap should be the nearest target for demand side. It also lays close to 38.2% retracement of last bearish wave. We think that the decisive battle of demand and supply will occur near that level however the risks are skewed to the downside. The lower bound of the previous medium-term channel lays there too.
USD/TRY – long at market
Stop loss: 2.8844
Take profit: 2.9764
Current week started with apathy however it's an abnormal situation on USDTRY and the volatility may return at any moment. The fundamentals hasn't changed much only political risks lessened a bit as the elections were finally announced. However President Erdogan who losses support may stir some emotions not to mention current military conflict with Kurds and ISIS. Even if USD remains weak ahead of Fed's meeting on September, the greenback should remain relatively strong against currencies of emerging markets such as TRY. The situation looks very interesting from the technical perspective. We observe an ascending triangle and the price will break either above or below it. Resuming the long-term bullish trend remains a base case scenario.