Dax index started for the second day this week with a gap down as the coronavirus cases spread around the world. World Health Organisation (WHO) warned that governments were not ready to tackle their own coronavirus cases, as the coronavirus spread further in America and Europe, as governments announced plans for more widespread testing. South Korea has reported 1261 confirmed cases, while the death toll in Iran rises to 19. Investors sentiment is still fragile and has shifted their attention to safe-haven assets.
Wall Street failed yesterday to hold the early gains and finished with the second-day sell-off. Asian markets all closed deep in the red, while the European indices as of writing paired early heavy losses and now is -1% lower, while the FTSE Mib managed to turn green.
Dax index is 1.52% lower at 12595 while earlier the index hit 12368 the lowest level since October 11, 2019. The sharp decline in Dax drove the price below the 200-day moving average and also pierced below the 50% Fib level. A positive sign for bulls is that as of writing the Dax index managed to return above those two critical levels.
On the downside, initial support for the Dax stands at 12368 the daily low. If the sell-off continues the next support stands at 12250 the low from October 19, and the 61.8% Fib retracement. Next level of support for is at 12039 the low from October 10, 2019.
On the other side, the immediate resistance for Dax stands at 12,638 the 200-day moving average. A break above that resistance, might test the daily top at 12689. A close above that level might challenge the next resistance point at 13145 the 100-day moving average.