DAX, Europe Talking Points:
- DAX40 recovers from recent sell-off but key psychological level of 14,000 holds bulls at bay
- European equities turn positive with German stocks leading the way
- Volatility remains heightened as investors continue to track developments in the Russia Ukraine war
European stocks have started the week on a positive note as the DAX, CAC and FTSE rebounded from the steep decline in prices that drove the Germany40 index into a ‘bear market’ early last week.
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Although Russia and the Ukraine are yet to reach an agreement, the EU (European Union) is expected to announce additional sanctions against Russia, posing an additional threat to energy prices.
However, after falling into a ‘bear market’ early last week, panic selling has temporarily subsided as investors continue to price in fundamental factors while paying attention to rising geopolitical risks. Although an element of ‘risk-on’ sentiment has returned to the European market, extreme price movements may likely persist as volatility remains heightened.
DAX (Germany 40) Technical Analysis:
The DAX experienced another impressive day of gains as bulls managed to temporarily drive price action above the 14,000 handle which continues to hold as critical resistance for the imminent move.
With prices currently trading between the 10 and 20-day MA (moving average) the CCI (commodity channel index) has retreated from oversold territory while Fibonacci levels continue to provide additional layers of support and resistance.
DAX (Germany 40) Daily Chart
Chart prepared by Tammy Da Costa using TradingView
DAX40 Levels to Watch
Support:
- S1: 13,800
- S2:13,687 (38.2% Fib of Feb – March move)
- S3: 13,500
Resistance:
- R1: 14,172 (20-day MA)
- R2: 14,396 (23.6% Fib of the 2020 – 2021 move)
- R3: 14,470 (61.8% Fib of Feb – March move)
— Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707
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