Dax index started higher in a cautious mode as investors digest the ECB decision yesterday and a sharp correction in Wall Street and more specifically in the big tech companies.
InvestingCube's S&R Levels
The European Central Bank (ECB) left the interest rates unchanged as was expected by analysts but surprised some analysts leaving the asset purchase programme (up to 1.35tn) also untouched. Lagarde announced a slight upgrade in the ECB growth forecast despite the recent disappointing data from Eurozone. ECB still expects GDP to shrink by 8% this year – better than the 8.7% contraction expected in June – while now sees an expansion of 5% next year.
Lagarde downplayed the negative inflation figures attributing the drop in temporary factors. Lagarde also said, referring to the euro strength that the ECB is closing monitoring the developments in the currency markets and will assess all the incoming information.
German CPI at 0.0%
In the data from our economic calendar, the German consumer prices index (CPI) drop 0.1% in August while the yearly CPI came in at 0.0%. The Germany wholesale price index August fell to -0.4% below the July reading of +0.5%.
Dax Index Daily Analysis
Dax index seesaws today around the 13,180 mark looking for direction after the mixed signals from ECB. The technical outlook remains bullish as the index finds support at the 50-day moving average.
First support for the index stands at 12,959 the low from September 9 trading session, while a break for Dax, below the 50-day moving average at 12,854 would invalidate the upward momentum at least for the short term.
On the upside, resistance for Dax index would be met at 12,255 the daily high and then at 13,310 the top from yesterday’s trading day. The recent high at 13,439 from September 2 is the next supply zone.