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DAX 40 Price Analysis: German DAX Slides as European Stocks Tank

DAX 40 Price Analysis: German DAX Slides as European Stocks Tank

Tammy Da Costa, Analyst

Europe, Germany 40, DAX Talking Points:

  • DAX 40 falters as bears drive prices below 13000
  • The war between Russia and Ukraine remains a prominent catalyst for European indices
  • Oil prices surge amid prospects of a Russia oil ban, European stocks sink

European stocks are having a difficult time staying afloat as the war between Russia and Ukraine remains the prominent driver of price action. With rising geopolitical pressures and soaring commodity prices, prospects of a Russia oil ban exacerbated concerns of further supply constraints, pushing the price of Brent crude futures to $139/bbl.

As risk appetite continues to dwindle, European equities have remained vulnerable with the DAX and FTSE plunging to critical support.

Germany 40 (DAX) Technical Analysis

Despite a strong start to the year, a shift in risk sentiment has weighed heavily on European stocks, forcing the DAX below the key psychological level of 13000 currently holding as resistance. After the formation of a ‘death cross’ on the daily time-frame, a break of 15300 (the 127.2% retracement of the 2020 move) and below 14000 allowed bears to gain control over price action before finding support at around 12495, the 76.4% retracement of the above-mentioned move.

With the bearish trend now intact (falling by 20% since the November high), the CCI (commodity channel index) remains in negative territory, a potential indication that the index may be oversold.

DAX Daily Chart

DAX 40 Daily Chart

Chart prepared by Tammy Da Costa using TradingView

Meanwhile on the weekly time-frame, prices have fallen below the 200 MA (moving average), currently providing an additional layer of resistance for the imminent move. If bulls manage to drive price action back above 13000, the next level of resistance resides at the 13297 Fibonacci level which could lead to a retest of 13800.

In contrast, if selling pressure persists, a break of 12495 leaves the door open for the 12000 handle with the next support level at 11689.

DAX Weekly Chart

DAX 40 Weekly Chart

Chart prepared by Tammy Da Costa using TradingView

--- Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707

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

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