The DAX Index rebound today after two days of steep losses as trade tensions spread around the globe. A headline crossing the wires the last hour suggest that US and China are close to agreement on the amount of tariffs that will be rolled back in December. President Donald Trump announced yesterday tariffs on steel and aluminium imports from Brazil and Argentina. Above that threatened to impose tariffs on France imports as retaliation to the tax imposed by the French government on U.S. technology companies. European Commission quickly came out with a reply d to President Trump’s threats saying that EU will act as one on US tariffs on French products.
President Donald Trump in an evening comment in London said that the trade deal between the U.S. – China might have to wait until after the U.S. election on November 2020.
German Economy Data Beating Expectations
Recent data from the German economy suggests that the worst for the economy might be left behind. The Germany Services PMI came in at 51.7 topping expectations of 51.3 in November, the Composite PMI came in at 49.4 also topping expectations of 49.2 in November.
European Monetary Union Services PMI came in at 51.9 beating expectations of 51.5 in November, while the Composite PMI came in at 50.6 also above expectations of 50.3.
Yesterday, the European Monetary Union Producer Price Index (year over year) came in at -1.9% as expected for October, the monthly reading came in at 0.1%, topping expectations of 0%.
German Manufacturing PMI registered at 44.10 topping market consensus of 43.8 for November. The European Monetary Union Manufacturing PMI came in 46.9 above expectations of 46.6 in November while the France Manufacturing PMI came in at 51.7, topping forecasts 51.6 in November.
Investors await a report on private-sector employment data from USA and international trade data and a weekly report on crude oil inventories.
Dax Index Positive Momentum Persists
Dax 30 index adds 0.99% at 13,122 today managing to reverse the two days drop while the outlook is still positive as DAX trades above all significant daily moving averages and the index returned as of writing inside the upward channel which drives the Dax since December 2018.
In order to reverse the recent pullback, Dax index needs to break above the resistance at daily top around 13,154 today’s high, while a move above that level will pave the way for the yearly highs at 13,375. Headlines around trade talks developments will drive the Dax index as we are heading into Christmas traders anticipate a Santa rally.
On the other hand, first support stands at 12,995.32 the daily low, next support zone will be met at the 50-day moving average around 12,829. A break below will add more sellers to the downward action that might drive the price to the 100-day moving average at 12,436.