DAX Price Chart, Coronavirus, ECB – Talking Points
- DAX outlook bearish as global equity selloff deepens on Coronavirus
- Japanese Yen surging against commodity-linked FX like AUD, NZD
- DAX index broke key support and is eyeing October lows. What now?
ASIA-PACIFIC RECAP: CORONAVIRUS RELENTLESSLY SPREADING
Asia-Pacific equities continued to face intense selling pressure as South Korea reported over 2,000 cases of the coronavirus, bringing the global total to 83, 049. The anti-risk Japanese Yen surged against its major counterparts with particular aggression against commodity-linked currencies like SEK, NOK, NZD and AUD. Looking ahead, it is likely this risk-off tilt from COVID-19 will continue favoring the Japanese Yen.
NZD/JPY Falling Over One Percent – Daily Chart
NZD/JPY chart created using TradingView
EUROPEAN EQUITIES TO SUFFER SAME FATE AS STOCKS IN APAC?
European stock markets may be dragged down with APAC equities as the global selloff continues. Eurozone growth prospects prior to the outbreak were already looking unsteady and COVID-19 could be severe enough to push Germany and Italy – the first and third-largest Eurozone economies, respectively – into a recession. However, ECB President Christine Lagarde held steady and said the virus is not at a stage that requires a response from monetary authorities – at least not yet.
DAX PRICE CHART
Since topping on February 19, the DAX has plunged over 10 percent and shattered a critical, multi-layered support area along the way between 12886.550 and 12948.170. The German index also broke support at 12644.350 along the way with confirmation, opening the door for further losses. The next key area to monitor will be between 11927.771 and 11869.280.
Selling pressure at these levels may abate and could be overwhelmed by buyers looking to find a bottom. However, if the index breaks below this area with follow-through, it could amplify bearish sentiment and make the prospect of a recovery that much more formidable. To get more updates on the DAX, be sure to
follow me on Twitter @ZabelinDimitri.
DAX – Daily Chart
DAX chart created using TradingView
DAX TRADING RESOURCES
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--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitri on Twitter
