Dax index slide in early trading amid rising coronavirus infections in Europe and a messy first debate between Joe Biden and Donald Trump. Better than expected retail sales data from Germany doesn’t help the index.
Germany Retail Sales for August came in at 3.7% above the same month a year earlier, beating the expectations of 0.4%, the monthly reading came in at 3.1% above July figure. The retail sales in August came 5.8% higher than the February reading and the pre-coronavirus levels.
The Germany Import Price Index in August came in at 0.1% topping the expectations of 0%. The Import Price Index yearly reading came in at -4% also above the forecasts of -4.1%.
In other news, China’s factory sector Purchasing Managers’ Index (PMI) for September reported at 51.5, above the 51.0 in August. Another Manufacturing PMI from Caixin dropped to 53 from 53.1 to 53.0, below the expectations of 53.1.
Yesterday’s Presidential debate turned out messy with the candidates interrupting and attacking each other, increasing fears that we are heading for a disputed Presidential election and high market volatility.
Dax index is 0.49% lower at 12,764 as the index has trapped between the 50 and 100-day moving average. The technical picture is neutral, and investors should be patient, waiting for a break above or below the moving averages that I mentioned above.
Support for the index stands at 12,726 the daily low. Next level to watch is the low from September 28 at 12,646. Bearish traders might open new short positions if the Dax breaks below the 100-day moving average at 12,520.
On the flip side, intraday resistance is at 12,836. A credible move above the 50-day SMA at 12,896 would offer a buy signal. The next target for bulls would be 13,279 the top from September 18.
