Dax index started the session almost unchanged after the GDP for the fourth quarter of 2019 came in at 0.0% below the expectations of 0.1%. The yearly reading for the GDP registered at 0.3% beating the expectations of 0.2%. After a robust start in the first quarter (+0.5%) of 2019 and a decline in the 2Q (-0.2%) there had been a slight recovery in the 3Q of the year (+0.2%). According to the latest calculations, that recovery was 0.1 percentage points stronger than had been communicated in November 2019.
The German Federal Statistical Office (Destatis) also reports that the resulting GDP growth was 0.6% for the year 2019 (both price and seasonally adjusted). The government and household final consumption expenditure slowed down. The development of international trade slowed down economic activity in the 4Q. Exports were slightly down on the 3Q, while imports of goods and services increased.
The Germany Wholesale Price Index rose to 1% in January from the previous 0% reading. The Wholesale Price Index yearly reading also climbed from the previous -1.3% to 0.3% in January.
Economic data failed to impress investors. The German economy avoided contraction in the fourth quarter of 2019 but remains in a vulnerable position. Taking into account the impending impact of the coronavirus outbreak, concerns are still entirely justified.
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Dax Index Levels to Watch
Dax index is 0.01% lower at 13744 having hit earlier fresh all-time highs at 13766.44. The index yesterday managed to recover the heavy morning losses showing strong positive momentum. The technical momentum is bullish for the Dax but still the fundamentals are not supportive.
On the upside, the first resistance for Dax 30 index stands at 13,766.44 today’s top and an all-time high. A break above might target the 13900 psychological resistance.
On the flip side, the immediate support for the Dax index stands at 13739 the daily low. A break below would open the way for the next support level at 13555 the low from February 11. Next support will be met at 13445 the low from February 10.