Dax index started on positive foot the week attempting to recover some of the previous week’s heavy losses. The German GDP contracted by 10.1% in the second quarter. Analysts were expecting a contraction of -9%. The yearly reading came down to -11.7% also below the expectations of -11.7%.
Germany Manufacturing PMI Beat Expectations
Stronger manufacturing PMI data from Europe support risky assets. Germany Markit Manufacturing PMI came in at 51 topping the forecasts of 50 in July. The European Monetary Union Manufacturing PMI in July registered in at 51.8 slightly better than estimates of 51.1.
Positive close from Wall Street and better manufacturing data from China today boost investor’s sentiment. The China Caixin Manufacturing PMI registered in at 52.8, beating the expectations of 51.3 in July. The June reading was at 51.2. The figure shows that the manufacturing sector continues to expand as the global demand picks up. The output and new orders numbers were the best reading since 2011.
Top performers are Infineon +2.56% higher at 21.68 Deutsche Post is 2.63% higher at 35.16 and Merck +2.04% at 110.25. On the other hand, Siemens Heathineers is 5.02% lower after the news that the company will buy Varian Medical Systems, a therapy software company.
Dax Index Daily Technical Analysis
Dax index is 1.31% higher at 12,475 returning above the 50-day moving average. The index breached the previous week outside the rising trend channel that drove the index since the March lows. The correction tested the 200-day moving average and bounced, but the index is still vulnerable outside the trend channel.
Bullish traders need a convincing close above the 50-day moving average today. If that achieved, then the next target would be the high from July 30 at 12,762. Next supply zone stands at 12,932 the high from July 24.
On the other side, immediate support stands at 12,365 today’s low. Next strong support would be met at 12,206 – the 200-day moving average. A break below might signal more aggressive selling.
Dax Index Daily Chart