DAX Index Hits Monthly Lows But Find’s Support at 50-Day SMA

Dax index gives up almost 3% making fresh monthly lows, amid worries that the impact of the coronavirus might extend as a new wave of infections hit Germany. Now the reproduction rate jumped to 1.1 after lockdown eased.

Data earlier today, confirmed a sharp slowdown in consumer price inflation (CPI), with officials warning that the coronavirus outbreak had forced them to estimate part of the data. The year-on-year rate of harmonised consumer price inflation in Germany came in at 0.8% for April, down from 1.3% in March. The Consumer Price Index for April came in at 0.4%, above the forecasts of 0.3%. 

The German finance minister Sholz said that in early June will announce a new stimulus package to support companies recover from the coronavirus crisis. The minister also said it’s in our interests also to help European countries recover from the COVID-19 crisis.

 

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Dax Index Support and Resistance

Dax index is 2.62% lower at 10,264, making fresh monthly lows, breaking below the 50-day moving average. If the Dax index closes today below 10,246, a new wave of sellers might join the action. The short term technical picture has deteriorated after today’s downward move. The longer-term picture is clearly bearish, and only a return above the 100-day moving average can cancel the bearish momentum. 

On the downside, initial support for Dax index stands at 10,160 the daily low. In case the index breaks below, then the next support is at 9,827 the low from April 6 trading session. Below 9,827 the next support will be met at 9,495 the low from April 3. 

On the other hand, immediate resistance for the Dax index stands at 10,474 the daily high. A move above 10.474 would target yesterday’s high at 10,700. A break higher might challenge 11,000 the high from May 11. 

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