The Dax index was moving higher on Monday after the market found support from last week’s drop. Positive data on the Chinese economy will boost stocks in the morning session, but a speech from ECB head Christine Lagarde will be the main focus in the afternoon.
China saw industrial profits grow for a fourth-consecutive month in August, largely due to the rebound in commodity prices and manufacturing. The country has rebounded quickly from the first quarter virus issues and will lend support to global growth prospects.
Today’s speech from ECB President Christine Lagarde could see volatility after policymaker Ignazio Visco said on Sunday that the recent Euro strength was “worrying” and that the bank could intervene if required. Visco added that the board was unanimous on the issue and if Lagarde clarifies this matter then the Euro should sell-off.
Yesterday saw a rise of 11,000 virus cases in France and the threat of further lockdowns is still a threat to the European economy. Tomorrow sees the release of German inflation figures, with unemployment figures on Wednesday, so these will be drivers of the Dax. The marke will also be following U.S. stock sentiment after a recent wobble in the post-virus recovery.
Dax Index Technical Outlook
The Dax broke key support last week at two uptrend lines and fell hard to the 12,500 level. The index has found a base around the 12,400 level and is looking to probe resistance with the first obstacle at 12,800. The Dax could move as high as 13,200 and still just be correcting the trend break. The risk is still to the downside unless we see a close above the 13,200 level, but especially the highs at 13,400. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.
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Dax Index Daily Chart
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