Dax index extends gains after yesterday managed to break above the 200-day moving average taking their cue from a late rally in Wall Street, supported by banks and financial after the ease on Volker rule restrictions.
The central theme continues to be the rising number of new infections. The US new coronavirus cases reached a new daily record yesterday surpassing the April figures. The latest increase poses a risk that some states may be forced to take new lockdown measures sooner or later. Texas and Florida already halted the re-opening procedure yesterday.
In Germany, the Import Price Index rose from previous -1.8% to 0.3%, while the yearly reading for the Import Price Index rose to -7% from -7.4%.
The ECB said that it is ready to use all instruments available but wants more economic data before any decision, which implies that we should not expect any move on this until September. Earlier today the ECB governing council member, Olli Rehn noted that the danger of deflation has re-emerged and reiterated that policy actions by the central bank are necessary and proportionate.
Dax boosted today by SAP +2.02% higher at 123.24, Infineon +1.82% higher at 20.97. Deutsche Boerse +0.94% at 161.85. On the other hand, Wirecard is -34.62% lower at 2.31. adidas is -0.21% lower at 237.50, Deutsche Bank is 0.10% lower at 8.30.
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Dax Index Daily Technical Analysis
Dax index is 0.71% lower at 12,266, keeping the bullish momentum above the 200-day moving average. The index is trading inside the ascending trend channel that started since the lows in March. The technical outlook is optimistic for the index as it holds above the major daily moving averages and inside the rising channel.
On the upside, initial resistance for the Dax is at 12,309 the daily high. A move above 12,309 would target 12,467 the high from June 24. A break above might test 12,622 the high from June 23.
On the other side, the first support for the Dax index stands at 12,233 the daily low. If the Dax 30 breaks below 12,233, then the next support is at 12,157 the 200-day moving average. Bears would take control, and the next support area will be met at 11,614 the low from June 15.
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