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DAX 30 Adds To Its Weekly Gains

DAX 30 Adds To Its Weekly Gains

Alejandro Zambrano, Market Analyst

Talking Points

  • DAX 30 adds to its weekly gains, and the short-term trend is bullish above yesterday’s low, while a slightly more conservative stance is to view the trend as bullish above last week’s low of 9735.
  • German Industrial Production, published this morning, rose by less than expected in a Bloomberg News poll.
  • German Exports rose by 1.9% MoM, higher than the 1.3% prior and the 0% expected, while imports declined by 2.3%, vs. the -0.3% expected and +0.4% prior.

The DAX 30 (CFD: GER30) had, at the time of writing, added to its weekly gains. The index rose with the Telecommunication Services Sector leading the way (up by 1.49% on the day), while the Materials Sector being the only losing sector today, is down by 0.08% at the time of writing.

The next resistance level is the May 2 high of 10,156, followed by the April 29 high of 10,253. A short-term support level is yesterday’s low of 9874, followed by last week’s low of 9735. Below last week’s low, the April 12 low of 9615 is the next support level.

The short-term trend is bullish above yesterday’s low of 9847 as it is a higher low in relation to last week’s low of 9735.

German Industrial Production, published this morning, increased by 0.3% YoY vs. the 1.1% expected as per a Bloomberg News poll. As this is a slower pace of growth than expected and the fact that growth is not particularly strong, there is the implication that the German economy has weakened somewhat.

Over the last 20 years, the correlation between quarterly German GDP YoY and the Industrial Production is 0.90, while a simple regression analysis (using Industrial Production to explain GDP) shows the R^2 is 0.81, with a Standard Deviation of Error at 0.95.

An average from over the last three months of Industrial Production data and simple regression model outlined above, forecasts that first quarter GDP is at 1.38%, a figure not too dissimilar from the fourth quarter GDP reading of 1.3% YoY. The official GDP reading will be published on May 13.

Our forecasts for Q2 2016 are now live on the site. Download them for free.

DAX 30 | CFD: GER30

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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

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

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