European Stocks Jump As Mood Music Improves

Dax to test 10150 as sentiment continues to improve?

Article Default

After a stronger finish in Europe on Monday, European stocks have jumped higher on the open again today. The mood in the market is showing signs of improving despite mixed headlines. With equities markets now moving higher for 4 of the past 5 sessions investors are debating whether there are grounds for a sustained move higher.

Chinese factory data overnight gave a flicker of hope that the world’s second largest economy is firing back up, despite large parts of the world grinding to a halt. Comments by the WHO that the coronavirus outbreak in Europe may be approaching its peak is also boosting sentiment and comes as Italy sees the smallest number of new cases in two weeks. 

However, it is still far too soon to be singing victory. At the same time that the outbreak in Europe is showing signs of stabilising, restrictions on public life are also being ramped up meaning that there is still a lot of economic pain to get through. The coronavirus outbreak in the US is also escalating at a frightening rate. Deaths there have already reached 3000.

Uncertainty remains
The biggest cap on sentiment is owing to the amount of uncertainty still out there. We don’t know how long the lock downs will continue for and whether there will be a second wave of infections when restrictive measures are eased. Furthermore, we have no idea what state the global economy will be in when we come out the other side. These fears are likely to limit gains 

Dax levels to watch
The Dax has jumped 1.5% on the open, trading around the key psychological level of 10000, the top end of its trading range. On the 4 hour chart the Dax trades above its 50 and 100 sma. A close above 10150 could see more bulls buy in.
Immediate support can be seen at 9779 (today’s low) prior to 9460 (100 sma) and 9350 (50 sma and low 29th March)
Immediate resistance can be seen at 10150 (high 25th March) prior to 10750 (high 11th March) and 11150 (200 sma).


More from Germany 30

Disclaimer: GAIN Capital UK Limited (trading as "Forex.com") is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, Forex.com does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by Forex.com or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although Forex.com is not specifically prevented from dealing before providing this material, Forex.com does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.