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DAX index
DAX index

DAX Index Rebounds On Strong Manufacturing Data from Major Economies

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Nikolas Papas Forex Analyst
    Summary:
  • The DAX Index started the week on positive foot supported by the strong Chinese manufacturing PMI’s from China. The German Manufacturing PMI

The DAX Index started the week on positive foot supported by the strong Chinese manufacturing PMI’s from China. The German Manufacturing PMI came in at 44.10 above market consensus of 43.8 for November. The European Monetary Union Manufacturing PMI came in 46.9 above expectations of 46.6 in November while the France Manufacturing PMI came in at 51.7, topping forecasts 51.6 in November.

Last week we had a big miss as the Germany Retail Sales (month over month) came in at -1.9% below expectations of 0% in October, while the yearly reading came in at 0.8% also below expectations of 1.1%. Recent data from the German economy suggests that the worst for the economy might left behind.

Traders await later today the US ISM Manufacturing data, and the testify of the new ECB President, Christine Lagarde in European Parliament; In an interview the previous week, Christine Lagarde asked euro zone governments to enhance local demand as the long trade war between China and USA weigh on global economic growth. President Donald Trump on Thursday signed the legislation backing protesters in Hong Kong. The U.S. administration plans to impose a new round of tariffs on Chinese goods on December 15.

Dax Index Technical Levels to Watch

Dax 30 index adds 0.66% at 13,323 today managing to rebound from Friday’s correction while the outlook is still bullish as DAX trades above all significant daily moving averages and the index holds inside the upward channel which started back in December 2018.

Dax index now faces the resistance at daily top around 13,336, while a credible move above that level will open the way for the next target at the yearly highs (13,375). Positive developments in the trade talk negotiations can boost the Dax index to fresh record highs at 13,600.

On the downside, immediate support stands at 13,263.69 the daily low, while the ascending trend line crossing at 13,069 would provide the next support zone. If there is a break below the ascending trend line, sellers will jump in and might target the next support at 100-day moving average around 12,142.

European stock markets also get a boost from stronger manufacturing data; In London the FTSE 100 benchmark is 0.48% higher at 7,381 the CAC 40 is 0.42% higher at 5,930. In Wall Street, the Dow Jones futures, are 0.41 per cent higher at 28,188, the S&P 500 is 0.39 per cent higher at 3,155 while Nasdaq is 0.35% higher at 8,447. Stocks in Asia ended the first trading session of the week higher with Hang Seng adding 0.37% per cent at 26,444, while the Nikkei ended 1.01 per cent higher at 23,529.

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