- Summary:
- It was another losing day for the DAX index as worries mount on the US-China trade deal. Technicals suggest it could test its July 2018 highs for support.
The DAX spent another day in the bears’ territory as the thought of a trade deal not happening between the US and China is slowly becoming real. Germany’s stock index lost 0.48% at 13,158.14.
German car parts manufacturer, Continental, lost the most as it announced to cut over 5,000 jobs in an effort to save. It was down 1.80% by end of day. Meanwhile, Commerzbank was in the red by 0.97% while Volkswagen lost by 0.87%.
If you remember, Tuesday’s losses were mostly driven by US President Donald Trump’s threats to scrap negotiations with the Chinese altogether if they refuse the offer on the table. This follows after the US Senate passed a bill that favored pro-democracy protesters in Hong Kong. To add more tension, Reuters reported yesterday that a few people involved in the negotiations said that a trade deal between China and the US do not look likely this year.
In terms on forex news, only the third-tier German PPI report was released yesterday. Data showed that producer prices contracted by 0.2% last month and disappointed expectations for it to have remained flat.
DAX Index Outlook
As of this writing, the German equity index is down almost 80 points as it trades at 13,082.75. If sellers continue to dominate today, the next support level for the DAX Index will be around 12,840.35 where it previously hit highs in July 23, 2018.
On the other hand, if risk appetite picks up, buyers could push it back to its recent highs around 13,300.Download our latest quarterly market outlook for our longer-term trade ideas.