Bears in Europe - DAX getting lower. The pound is rising after Merkel's words.

The market reacted very poorly to the publication Minutes from the FOMC meeting. We did not see (especially on pairs with the dollar) outstanding supply and demand movements. Recently, with larger and more significant publications, we have encountered a lack of response from market participants. Nevertheless, the pound deserves special attention on Thursday's session.

Europe in red

The main European indexes are not surprising. Looking at the charts from the perspective of several months, most of them successively record declines. A poor session on the Old Continent may be a reflection of the Wall Street session. The United States is fresh after the publication of PMI data. Information presented to investors turned out to be much worse than analysts' forecasts. Bad mood moved to Europe, where DAX lost today at the end of the session. Currently, NASDAQ is doing the worst, decreasing by almost 1%. Additional bearish sentiment fueled the Bundesbank, which issued a statement that it currently sees no need for fiscal stimulation in Germany.

DAX [DE30] chart, H4 interval. Source: xNUMX XTB xStation

At the time of writing the article (19: 30) DAX pulled out almost half of the supply movement in the morning. We are in an interesting place from the point of view of technical analysis. The 11805,9 level may be crucial for subsequent German index sessions. A large proportion of investors are in favor of changing the trend and a slight rebound. Considering the data from the German economy, it is difficult to count on high demand movement.

Breaking the bad luck on the pound?

Merkel has touched the market today with a statement about the border between Ireland and Great Britain. She stated that there is a high probability of termination within the next month. The market reacted very optimistically, not taking into account the words of Johnson, who not so long ago talked about the lack of chance to negotiate the terms presented by Great Britain.

Chart GBP / USD, H1 interval. Source: xNUMX XTB xStation

On the one hand, the words of Merkel can be read as the first, clear sign of the desire to continue talks and negotiations. On the other hand, a momentary, enthusiastic reflection may be a haven for further declines.

The pound reacted strongly to the statement of the German Chancellor. The breakout we see at the H1 interval has not yet been negated or tested. On the contrary, we still see a slight reflection above the 1,22494 level.