Dax index started higher the session amid improved investor’s sentiment after strong retail sales reported yesterday in the USA. The U.S. Retail Sales in May increased by 17.7% to $485.5 billion topping the forecasts for an 8% rise, the Retail Sales excluding Autos came in at 12.4%, also above the expectations of 5.5%.
In Europe, the car sales drop 57% in May after a massive 78% drop in April. 581,000 new cars were registered, compared to 1.21 million in May 2019. In Spain, sales were down by 72.7% and around 50% in Germany, Italy, and France.
Fear about a second wave of COVID-19 infections didn’t halt the three days rally in stocks. Beijing ordered all schools to close in an effort to contain a second infections wave. One more food market was also shut, while citizens must now be tested before leaving the city.
IMF warned for a revision of their forecasts, as the decline in the global economy will be far worse than the 3% contraction forecasted in April.
Dax index is 0.54% higher at 12,389, as the index continues higher for the third consecutive session as the technical picture signals a bullish trend above the 200-day moving average. The positive momentum might halt if the index returns below the 200-day moving average support.
On the upside, first resistance for the Dax is at 12,395 the daily top. A move above 12,395 would target 12,764 the high from June 10. A break above might test 12,923 the recent high from June 8.
On the flip side, immediate support for the Dax index stands at 12,308 the daily low. If the Dax breaks below 12,308, then the next support is at 12,147 the 200-day moving average. Next support area will be met at 11,621 the low from June 15.