Today saw the release of German PMI figures and the headline was a dip in the composite figure. A better than expected manufacturing PMI compensated for a drop in services PMI, but the latter showed a contraction in the German services industry.
Services PMI came in at 49.1 after expectations of a 53 print. Manufacturing in the economy was strong with a 56.5 reading, compared to analyst forecasts of 52.5. The manufacturing figure should help to boost the Dax stocks, but the services number is a worry.
Later in the session, we will also get the release of PMI numbers from the Eurozone with a 51.7 composite number expected, which would be lower than last month’s 51.9. German consumer confidence also came in lower with a reading of -1.6 verus expectations of -1.
The latest virus lockdowns in the United Kingdom will have traders worried about the potential for similar restrictions coming to European countries. Madrid saw stricter lockdowns put in place, with France also announcing a tightening of measures after record case numbers at the weekend. Germany saw 1,600 new cases and 10 deaths yesterday and an escalation could see the Dax index lower.
Dax Index Technical Outlook
The Dax index was sharply lower on Monday and yesterday saw a weak bounce. The Dax is trying to bounce higher today, but selling pressure will remain beneath 13,000. There are plenty of support levels on the way down to 11,800 support that may help to contain a deeper pullback. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.
Dax Index Daily Chart