DAX 30 Little Changed, German PMI’s Disappoint
- The DAX 30 maintains a bullish bias.
- German Composite PMI disappointed this morning as it declined to 53.8 vs. an expected rise to 54.2.
- Eurozone Composite printed 53 vs. the 53.3 expected.
The DAX 30 was, at the time of writing, little changed in relation to yesterday’s range and did not react much to the publication of today’s German PMI reports.
Markit German Manufacturing PMI rose to 51.9 vs. the 51 expected in a Bloomberg Survey, while Services PMI declined to 54.6 vs. the 55.1 expected.
The Composite PMI, which is a combination of the Services and Manufacturing PMIs, fell to 53.8 from 54, which was a decline to a nine-month low. Yet the composite index figure is strong enough to indicate that the German economy is expanding. Some economists say that the details of the report are better than what the headline figure is implying. Economists point out that Manufacturing PMI has risen from near stagnations levels to a three-month high, which is a positive along with the rise in new business levels and employment.
From a technical perspective, the DAX 30 maintains a bullish bias. The April 20 low of 10,283 is the short-term trend defining level and the trend is bullish given that the April 20 low is higher than the weekly low of 9906.
Potential support below the April 20 low could be the April 14 high of 10,110, a level that used to a resistance level.
Resistance levels are the psychological level of 10,500, which is also near this week’s high. Beyond the 10,500 level, the next potential resistance level is the January 3 closing level of 10,692, followed by the December 30 high of 10,880.
Yesterday’s ECB Rate Decision added noise to the DAX and it was little-changed post the meeting. The central bank pledges to maintain an ultra-loose monetary policy, which tends to be favorable for stocks. For more on the ECB rate decision please read: “EUR/USD Higher as ECB Opts For Status Quo, Eyes on Draghi.”
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DAX 30 | CFD: GER30
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
Contact and follow Alejandro on Twitter: @AlexFX00
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