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DAX Analysis: Gains Accelerate on Auto Boost

DAX Analysis: Gains Accelerate on Auto Boost

Justin McQueen, Strategist

DAX Analysis and News

  • US Proposes to Stop Threats of EU Auto Tariffs
  • DAX Led Higher by German Auto Names

Auto Names Drive the DAX 30 Index Higher

First signs of a slight easing of trade tensions between the US and EU have been realized following reports after market yesterday that the US has offered to suspend threats to impose tariffs on cars imported from the European union if duties on US cars are lifted. As a reminder, last month the Trump administration had threatened to impose a 20% import tariff on all EU vehicles.

In response to these latest developments, German auto names, Daimler (+3.3%), Volkswagen (+2.8%) and BMW (+4%) which make up roughly 12.5% of the DAX are leading the index higher this morning, which has surged over 1%. However, price action could be somewhat choppy ahead of the implementation of US tariffs on Chinese goods tomorrow.

Background of trade wars

  • Impact of Trade Wars, click here

DAX PRICE CHART: 1-MINUTE TIME FRAME (Intra-day)

DAX Analysis: Gains Accelerate on Auto Boost

Chart by IG

Having seen a modest break-out through 12,400, the DAX is likely to consolidate around the around 12,430-50 for now. Improved sentiment regarding German politics and continued easing of trade tensions could be the catalyst to push the DAX back towards 12,500.

For more technical analysis on the DAX, click here

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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