The DAX 30 is lower by 0.60% at the time of writing, as it weakened following softer crude oil prices on announcement by OPEC and Russia, namely that they are freezing crude oil production at the January 11 levels. The markets reacted by selling crude oil as they would have preferred a production cut, rather than a production freeze at the January 11 levels.

The German sentiment indicator, the ZEW Expectation Index, was also published this morning and added to the bearish sentiment as it dropped to 1 from 10.2 in January. While this beat the 0 expected, an ever declining ZEW expectations index tends to result in a lower DAX 30.

Just a Pullback?

From a technical point of view, a slide on the DAX 30 was needed after yesterday's strong surge. Fibonacci support levels from last week's low of 5706, suggest that traders may opt for long positions in the 8990 to 9055 range, with stops below 8845. An alternative entry is near the February 10 high of 9118. On a break to the 8845 level, the DAX may reach last week's low of 5706.

If the DAX 30 indeed manages to create a higher low in the range highlighted above, it would be fair to expect a test of the February 8 high of 9338 and the February 5 high of 9478 in the case of an extension.

However, in the long run, the trend is bearish below the January 27 high of 9933 and it's fair to expect the DAX 30 to resume its downward trend over the next few days.

DAX 30 | FXCM: GER30