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DAX 40 Daily Price Analysis – DAX 40’s Slide Below Pivot Point Raises Red Flags for Investors

  • 3 mins read ●
  • Published:
dax30 germany market analysis 3

Today, DAX is down 1.14% following the German CPI data and negative global sentiment. Technical analysis indicates a bearish shift for the DAX 40, highlighted by its break below the bullish channel and key indicators such as the S1 pivot point and the 200-day EMA, suggesting potential further declines.

Key Points

  • The DAX 40 slightly rose on Thursday, continuing its positive trend with a 4.61% March rally and a 10.39% first-quarter gain.
  • Today, the DAX opened at 18,519 and fell by 1.14% amid mixed reactions to recent economic data, as well as lower-than-expected German CPI data.
  • Technical analysis shows a bearish turn for the DAX 40, with a break below the bullish channel and key technical levels, pointing to potential further declines.

DAX 40 Daily Price Analysis – 02/04/2024

In the previous trading session on Thursday, the DAX 40 index saw a modest increase, closing the day at 18,493, a 0.08% rise from its opening. This slight uptick continued the index’s impressive performance, with a notable 4.61% rally in March. It concluded the first quarter with an overall gain of 10.39%. 

Despite the positive trajectory in recent times, today’s trading session began on a slightly subdued note along with the negative global sentiment around the world. The German index opened at 18,519, reaching a high of 18,571.05 before dipping to a low of 18,385.55 after the lower-than-expected German CPI release, marking a decrease of 1.14% from the opening price. All in all, it’s a hectic day for the German index.

The DAX’s performance on Thursday and earlier today can be attributed to a mix of economic data releases and market sentiment. On Thursday, German retail sales experienced a significant drop of 1.9% month-on-month in February, contrary to the anticipated increase of 0.3%. This decline may have dampened some of the positive momentum. However, employment data offered a silver lining, indicating a year-over-year increase of 0.4% in February, alongside a month-on-month rise of 14,000 after January’s 56,000 increase.

Key Economic Data and News to Be Released Today

High-impact economic releases from Germany include the Harmonized Index of Consumer Prices (YoY), Consumer Price Index (YoY), and Consumer Price Index (MoM). As of writing, the German MoM CPI came out at 0.4%, lower than analysts expectations of 0.5%. This data has pushed the index lower by 1.14%.

These indicators are critical barometers of inflationary pressures within the eurozone, influencing ECB policy decisions. Given the DAX’s sensitivity to shifts in monetary policy outlook, these data releases could catalyze significant price movements, depending on whether they reinforce or alleviate concerns about inflation.

Visit our Economic Calendar

DAX 40 Technical Analysis – 02/04/2024

Our technical analysis of the DAX 40 showed a significant shift in the index’s trajectory, marking a notable change from its preceding bullish trend. The index has breached the lower boundary of its bullish channel, which distinctly signals growing bearish tendencies within the market. This breakout to the downside is a critical development, as such patterns often indicate a shift in market sentiment, suggesting that sellers are gaining momentum against buyers.

Compounding this bearish outlook, the DAX 40 has also closed below two key technical indicators: the S1 pivot point and the 200-day Exponential Moving Average. A close below the S1 suggests that the index might struggle to find immediate upward support, potentially leading to further declines.

dax 40 15m chart
DAX 15-Minute Chart – 02/04/24

Given these technical developments, the immediate outlook for the DAX 40 appears bearish. The next critical price level for the index is the support zone located at the 18,375 price point. This level represents the next possible floor for the index, where we might anticipate some buying interest to emerge in an attempt to stabilize the price. However, the strength of the current bearish momentum suggests that the market may test this support level in the near term.

Traders and investors should closely monitor the index’s behavior as it approaches this support zone. A rebound from this level could indicate a potential short-term recovery or consolidation phase. Conversely, a breach below this support further validates the bearish outlook, potentially opening the path for a deeper correction.

DAX 40 Fibonacci Key Price Levels 02/04/2024

Short-term traders planning to invest in Dax 40 today should keep a close eye on the following key price levels for the day:

SupportResistance
18375.8118532.76
18350.0018585.80
18310.7118648.00

Risk Disclosure: The information provided in this article is not intended to give financial advice, recommend investments, guarantee profits, or shield you from losses. Our content is only for informational purposes and to help you understand the risks and complexity of these markets by providing objective analysis. Before trading, carefully consider your experience, financial goals, and risk tolerance. Trading involves significant potential for financial loss and isn't suitable for everyone.

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