Dax index started the trading day lower after a correction from record highs in Wall Street. The pullback triggered by Fed cautious stance on the world’s top economy.
FOMC warned that the coronavirus crisis weighing on the economy and threatens the medium-term economic outlook. The rebound in employment in June and July had slowed down in August after the rising number of new coronavirus infections in many States. Many FOMC members support further accommodation while the interest rates will stay at current levels until the end of 2020. The Fed committee also raised concerns over the potential benefits of the yield curve control.
The Fed cautious tone triggered profit-taking in global equities. Investors rushed to take some profits off the table as Nasdaq and S&P 500 trade at record highs.
Wirecard will be replaced by the food delivery company, Delivery Hero AG in the Dax index after today’s close. Wirecard kicked out of the index after a 2 billion scandal and the arrest of its CEO Marcus Braun.
Most of the Dax shares are in the red today, Volkswagen is -2.52% lower at 136.04, Daimler is -2.45% at 41.89, Bayer is -2.09% at 56.75, Deutsche Bank is 1.77% lower at 7.98, and Infineon Technologies is 1.96% lower at 22.06. On positive foot started Vonovia 0.45% at 58.48 and Beiersdorf 0.05% at 94.18.
Dax Index Daily Analysis
Dax index is 1.20% lower at 12,833 as traders taking some profits off the table, but sellers don’t look that strong to reverse the bullish momentum. As I have mentioned in a previous Dax analysis DAX Index Lower Again – Bears Targeting 12,599, but that scenario looks away, as the index initially needs to break below 12,791 today’s low, and then the 12,700 round figure. A break below might challenge the 50-day moving average at 12,625.
Dax Index resistance stands at 12,858 the daily high. More sellers would emerge at 12,982 the top from yesterday’s trading session. A break above would test 13,042 the high from August 18.
Dax 30 Daily Chart