DAX Price Analysis: Major EU-US Breakthrough Boosts Auto Makers
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DAX Analysis and News
- EU’s Juncker and President Trump De-escalate EU-US Trade Dispute
- Auto Names Lift DAX Higher
DAX Outperforms on EU-US Breakthrough
The German 30 blue chip index is the notable outperformer this morning, rising some 1.5%. This followed the meeting between EU’s Juncker and President Trump whereby they agreed to refrain from imposing tariffs on European cars for now, while the two sides had also launched negotiations in order to cut other trade barriers, subsequently easing the threat of a trade war between the EU and US.
Background of trade wars
- Impact of Trade Wars, click here
In reaction to the breakthrough, European auto sector (SXAP) is the biggest gainer (+1.3%), which had been hit hard amid threats from the Trump administration that they were looking to impose a 20% import tariff on all EU vehicles. The auto heavy DAX has been supported by the likes of Volkswagen (+3%) and BMW (2%), while Daimler (Flat) however has dipped following their earnings update.
DAX Price Chart: Daily Time Frame (April-July 2018)
The DAX briefly broke above the July highs, however, quickly retraced with the 61.8% Fibonacci retracement at 12771 holding firm. Consequently, a firm break is needed in order to revisit 12800. In terms of near term support, the 50% Fib at 12643 remains prominent, which also coincides with the 100DMA.
--- Written by Justin McQueen, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.