DAX Index Give Up Gains as Coronavirus Spread to Europe
Dax index reverses early gains after UK officials confirmed two coronavirus cases in UK. The index started the session higher but fragile investors sentiment turned sour after the headlines about the coronavirus and weaker GDP data from the European Monetary Union. The Gross Domestic Product (QoQ) came in at 0.1% below the market’s expectations of 0.2% for the fourth quarter. The yearly GDP reading registered in at 1% below estimates of 1.1%. The European Monetary Union Consumer Price Index came in at 1.1%, below the forecasts of 1.2% in January.
The big disappointment came from Germany. The Retail Sales (MoM) came in at -3.3% below the estimates of -0.5% in December. The yearly reading also came in at 0.8% below the forecasts of 5%.
Dax index is 0.47% lower at 13094 as traders shift to safe-haven assets amid the coronavirus outbreak and ahead of the weekend. Yesterday the index broke below the 50-day moving average and cancelled at least for the short term the bullish momentum.
If Dax continues the correction, the initial support will be me at 13079 the daily low. A close below would pave the way for the next critical support at 12947 the 100-day moving average. Next level to watch on the downside is the 200-day moving average at 12525.
On the upside, first resistance for the Dax stands at 13,208 today’s top. More offers above that area might emerge at 13277 the 50-day moving average. If bulls surpass that level the next target would be the high from January 29th at 13374.