Dax index started lower on the last trading session of the week as quarantine restrictions return to Europe. The U.K. decided to quarantine for 14-days the travellers from France, sending a negative signal across the continent. The recent rising number of new coronavirus infections have increase doubts for a fast economic recovery.
The second reading of Eurozone GDP came in at -12.1% in line with expectations. Eurozone June trade balance came in at €17.1 billion, beating the expectations of €14.5 billion after the exports grew by 11.1% and the imports grew by 5.7%. European Monetary Union Employment Change reported in at -2.9%, below the forecasts of -1.7% in the second quarter.
The recent rally in stocks around the globe sparked by the speculation of a new relief package in the USA starts to fade away as Democrats and Republican failed to reach an agreement. Meanwhile, weak retail sales figures from China and industrial production below the expectations showed that the Chinese recovery is slower than expected.
Travel and leisure stocks are under pressure, in European markets after the new restrictions. Daimler is 1.30% lower after the company announced that it reached an agreement with U.S. regulators to pay 3 billion over the diesel emission scandal. MTU Aero Engines is 3.22% lower at 148.65. Deutsche Bank is 2.69% lower at 7.86 and RWE is 1.59% lower at 34.01.
Dax Index Analysis
Dax index is 1.43% lower at 12,808 as the correction from the recent highs continues for the second straight day. The technical outlook remains bullish despite the recent pullback and only a break below the 50-day moving average can cancel that momentum.
Support for the Dax stands at 12,798 today’s low. More bids expected to emerge at 12,590 the 50-day moving average, which if breached would open the way for 12,314 the low from July 31.
On the upside, immediate resistance for the Dax index would be met at 12,971 the daily highs. More sellers await at 13,098 the high from August 12, while a break above might test 13,294 the top from July 21.
Dax Daily Chart