DAX Nears Key Support Ahead of FOMC Decision
21 September 2022
German DAX index traded somewhat higher on Wednesday, having erased earlier losses after Putin's announcement and traders now await today's FOMC decision, due later during the US session.
Russia calls more men to fight in Ukraine
In a move that shocked the West on Wednesday, Russian President Vladimir Putin announced a partial mobilization of his nation's 2-million-strong military reserve. He reaffirmed his aim to annex the regions of Ukraine that are now under Russian control.
Putin stated that only individuals with prior military service, relevant expertise, and training would be eligible for mobilization. It would probably impact 300,000 people, Defense Minister Sergei Shoigu stated in a subsequent televised address.
Fed decides later today
The Fed's decision on monetary policy will be made public later in the session. It is largely expected that the Fed will boost interest rates by at least 75 basis points, with some analysts pricing in a 100 bps rise as well, in response to last week's hotter-than-expected US inflation data.
Key support near
The critical support for the DAX index stands near 12,400 EUR. If broken to the downside, massive stop-losses of long positions would be hit, possibly sending the price further lower toward 14,000 EUR.
Alternatively, if bulls defend that support for the fourth time, we could see a relief rally toward 13,000 EUR. Volatility after today's Fed decision could set the trend for the next days.