Europe, Germany 40, DAX Talking Points:
- DAX 40 retreats, inflationary fears resurface as Russia Ukraine conflict remains unresolved
- The war between Russia and Ukraine remains a prominent catalyst for German stocks
- ECB President Christine Lagarde juggles between soaring prices and economic growth
Germany 40 (DAX) Technical Analysis
The Dax Index (Germany 40) has come under pressure once again as Europe remains particularly vulnerable to the ongoing tensions between Russia and Ukraine. After falling to critical support earlier this week (Monday), an optimistic tilt in risk sentiment allowed the DAX to rally sharply before running into key psychological resistance at 13,800.
With rising energy prices and Europe’s major reliance on Russia and Ukraine for oil and gas, the ECB has now been placed under additional pressure as it juggles between tackling inflation while simultaneously supporting economic growth.
In response to the elevated energy prices and the unprecedented outcome of the war, inability for DAX bulls to rise above the 13,800 handle allowed bears to drive prices lower before finding support at the 13,297 Fibonacci level which may likely continue to hold bears at bay, at least for now.
DAX Daily Chart
Chart prepared by Tammy Da Costa using TradingView
As price action remains well-below both the 50 and 200-day MA (moving average), a break below current support (13,297) and below 13,000 could see bears driving prices back towards the 12,495 Fibonacci level with the next big level holding firm at 12,000.
— Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707