Dax index slumps to nine-month lows in the last trading session of the worst week since the 2008 global financial crisis. The World Health Organization Director-General Tedros said yesterday that the coronavirus has pandemic potential. Now there are over 83,000 people infected around the globe in 50 countries. Now investors fear that the coronavirus outbreak has the potential to trigger the next global recession.
Dax index has lost over 15% from the highs on February 20, while is 11% lower since the beginning of 2020. Germany Unemployment Rate came in at 5% in line with expectations in February. The Unemployment Change below came in at -10,000 below the expectations of 3,000 in February. The data shows that the German economy has not yet been hit by the coronavirus outbreak.
Dax index is 4.40% lower at 11,819 while earlier on the day the index hit 11,724 the lowest level since August 29, 2019. The sell-off accelerated after the Dax broke below the 200-day moving average. The huge gap-down today has also breached the ascending trendline that started in January 2019.
On the downside, the first support for the Dax index stands at 11,724 the daily low. In case the sell-off continues the next support stands at 11,672 the low from August 29. Next critical level of support for Dax would be met at 11,578 the low from August 28th, 2019.
On the flip side, the immediate resistance for the Dax index stands at 12,008 the daily top. A break above, might test the 12,200 mark the low from yesterday trading session. A close above that resistance might challenge the next resistance point at 12,639 the 200-day moving average.