Dax index started the session higher as investors see opportunities for a rebound after the index yesterday successfully tested and rebound from the 50-day moving average. Investors ignored the sharp correction in Wall Street and are out for bottom fishing.
Economic Data From China Boost Stocks
China announced today strong economic data. China Consumer Price in August came in at 0.4% in line with forecasts while the CPI yearly reading registered at 2.4% also matching expectations. The China Producer Price Index in August came in at -2% above the 2.4% decline in July.
AstraZeneca Paused Coronavirus Vaccine Trial
News that AstraZeneca and Oxford University’s Covid-19 vaccine trial has been paused due to unexplained illness in a participant might weigh on risky assets, but today that is not the case.
Focus On ECB
Investors await the European Central Bank (ECB) monetary policy decision tomorrow with the economists not expecting lower interest rates tomorrow, but this week analysts priced in a ten basis-point cut in the interest rates to minus 0.6% for next year. The recent rally in the common currency and slowing economic recovery supports the case for further monetary stimulus.
Dax Index Analysis
Dax index despite the heavy loses yesterday, managed to bounce from the 50-day moving average support. The bounce yesterday gave a positive signal to the bulls, and the index opened higher, adding as of writing 1.17% at 13,119. It looks that for now, the correction absorbed around the 12850 mark. If the bears break that support, then the next target would be 12,756 the low from September 4.
On the other hand, intraday resistance for Dax is at 13,134 today’s high. The next hurdle for the index would be met at 13,445.
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Dax Index Daily Chart