DAX experiences a technical rollback on Wednesday: it has grown by ~1%. Yesterday DAX dropped to 9100 points, which was a minimum since the middle of March 2014.
A few factors affected the decrease of the “Blue Chip” index.
One of the major factors was the escalation of the conflict and combat operations on the southeast of Ukraine. A possibility of bringing Russian troops to the Ukrainian territory scares market participants away from the investment in European equities.
Another factor that applied pressure on DAX is a decrease of the business expectations in Germany.
According to ZEW data, the Business Expectations index has dropped from 46.6 to 43.2 points in April. Most likely businessmen confidence was affected by the situation in the Ukraine.
Click on the picture to see full-size
However, ZEW has also noted a significant increase of current economic conditions from 51.3 to 59.5, which is the best value since July 2011.
Germany’s economy is in a good shape: it grew by 1.3% in last quarter.
Click on the picture to see full-size
Germany’s trade balance demonstrates a positive dynamics as well. Export grew by 4.6% to 92.4 B euros in February. Import grew by 6.5% and got to 76.1 B euro.
Click on the picture to see full-size
We think that Germany’s economy will continue growing, which will affect DAX positively.
DAX looks oversold from the technical point of view. Bullish divergence shows that a trend will change soon. Current resistance level is located at 9350. If bulls are able to breach this level, then a growth till 9415 and 9500 can take place.
Click on the picture to see full-size
9100 is a support level for DAX. If bulls cannot secure their positions here, then a fall can continue to 8960 and 8860. - See more at: https://www.mayzus.com/economical-news/dax-index-is-rolling-back-after-getting-to-the-minimum-levels.html#sthash.OmvAKs7n.dpuf
A few factors affected the decrease of the “Blue Chip” index.
One of the major factors was the escalation of the conflict and combat operations on the southeast of Ukraine. A possibility of bringing Russian troops to the Ukrainian territory scares market participants away from the investment in European equities.
Another factor that applied pressure on DAX is a decrease of the business expectations in Germany.
According to ZEW data, the Business Expectations index has dropped from 46.6 to 43.2 points in April. Most likely businessmen confidence was affected by the situation in the Ukraine.
Click on the picture to see full-size
However, ZEW has also noted a significant increase of current economic conditions from 51.3 to 59.5, which is the best value since July 2011.
Germany’s economy is in a good shape: it grew by 1.3% in last quarter.
Click on the picture to see full-size
Germany’s trade balance demonstrates a positive dynamics as well. Export grew by 4.6% to 92.4 B euros in February. Import grew by 6.5% and got to 76.1 B euro.
Click on the picture to see full-size
We think that Germany’s economy will continue growing, which will affect DAX positively.
DAX looks oversold from the technical point of view. Bullish divergence shows that a trend will change soon. Current resistance level is located at 9350. If bulls are able to breach this level, then a growth till 9415 and 9500 can take place.
Click on the picture to see full-size
9100 is a support level for DAX. If bulls cannot secure their positions here, then a fall can continue to 8960 and 8860. - See more at: https://www.mayzus.com/economical-news/dax-index-is-rolling-back-after-getting-to-the-minimum-levels.html#sthash.OmvAKs7n.dpuf
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