DAX Erases Most of Jackson Hole's Losses
30 August 2022
The German DAX index rose nearly 2% on Tuesday, erasing most of Friday's losses as it traded above 13,100 EUR again.
During Tuesday's Asian session, Bloomberg's most recent information about the Eurozone's capacity to combat the energy problem gave the market's cautious optimism even more support.
"The European Union is set to meet its gas storage filling goal two months ahead of target as the bloc braces for a tough winter with Russia limiting supplies and soaring energy prices raging through the continent," mentioned Bloomberg.
EU data remain weak
According to the most recent data release from the European Commission, the Final Consumer Confidence Index for the Eurozone stayed at -24.9 in August from the -24.9 previously recorded. The information was in line with market forecasts of -24.9.
The bloc's Economic Sentiment Indicator for August fell to 97.6 from the previously reported 98.9 and the predicted 98.0.
The industry's sentiment declined to 1.2 points from 3.4 in August, while the largest sector of the economy, services, saw a decrease to 8.7 points from 10.4 in July.
Moreover, European Central Bank (ECB) Chief Economist Philip Lane said on Tuesday, "we need to keep raising interest rates."
When discussing the policy outlook on Monday, Lane stated that "a steady pace - neither too sluggish nor too quick - in decreasing the gap to the terminal rate is crucial for various reasons."
Rising to resistance
The next selling zone should be at previous highs and lows in the 13,400 EUR area. If DAX jumps above, the medium-term could change to bullish, aiming at the bearish trend line near 13,800 EUR.
At the moment, it is hard to imagine a strong rally, considering the current fundamental situation.
On the downside, the support could be found at 13,000 EUR before this week's lows at 12,700 EUR.