Dax index started the session muted but soon turned higher as the index hovers close monthly highs. Stocks rallied across the globe after fiscal and monetary measures from central banks and governments. The partial reopening of the businesses helps investors sentiment despite the dismal economic data coming for the unemployment, the services and manufacturing sectors. News that the German government is preparing a plan to bail out the troubled Lufthansa is also supporting equities.
The respected Ifo institute sees German economy contracting by 1.9% in Q1 12.2% in Q2 and 6.6% in 2020. The German economy expected to return to pre-coronavirus levels by the end of 2021.
Investors await the ECB decision later on the week, but we don’t expect any surprises.
In Germany now there are 56,337 confirmed coronavirus cases, while 117,400 persons have recovered. Yesterday, another 162 deaths reported that takes the total death toll to 5,913.
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Dax Index Support and Resistance
Dax index is 0.70% higher at 10,735, in an attempt to break above the critical 50-day moving average resistance. The rebound from March lows is ahead of a big test of the 50-day moving average, a very crucial level for the next weeks. Dax index technical picture is neutral now, but a break above 10,750 might attract more buyers.
Looking at the daily chart, the first resistance for the Dax index stands at 10,747 the daily top. A move above 10.747 would target the high from March 10, at 11,040. A move higher might challenge 11,770 the high from March 6.
On the other side, initial support for Dax stands at 10,651 the daily low. In case the bears persist, the next support is at 10,303 the low from April 24. Below 10,303 the next support will be met at 9,840 the low from April 7.
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