DAX 30 - US Trade Fears and Auto Blues
DAX 30 News and Talking Points
- Trade tariff fears continue to weigh on the DAX 30
- Daimler in US President Trump’s sight.
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DAX 30 Nearing Important Fibonacci Support
The Germany DAX 30 continues to slide – six out of the last nine days have seen negative closes – after US President Trump made it clear that he would place a 20% tariff on the European automobile sector if trade barriers and tariffs are not removed. Daimler, the sixth-largest constituent of the DAX 30 at just over 7%, fell around 2% and is now down nearly 25% on the year. Daimler recently cut its profit outlook on fears that escalating US-China trade tensions will hit their SUV sales. As an industry, German exports just half-a-million cars a year to Germany, according to a recent FT report citing the German association of the automobile industry.
The situation may get even worse for the industry if Brexit unless negotiations take a positive turn. The UK is Germany’s largest market for automobiles with 769,000 vehicles sold last year. Any trade barriers erected by the UK if a ‘no-deal’ Brexit becomes a reality will hit the German industry very hard.
On the charts the DAX 30 is nearing Fibonacci support at 12,279 which needs to hold, otherwise all of the March 26 – May 22 rally – around 1,500 points or 12% - will be given back in the space of around three weeks. The index trades below all three moving averages while the RSI indicator points lower but nears oversold territory.
DAX 30 Daily Price Chart (November 2017 – June 25, 2018)
What’s your opinion on the DAX 30? Share your thoughts with us using the comments section at the end of the article or you can contact the author via email at Nicholas.email@example.com or via Twitter @nickcawley1
--- Written by Nick Cawley, Analyst
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.