The German Index puts a break on its recent gains, following the ECB’s unchanged interest rate decision and downgraded growth forecasts. Despite lower growth prospects, President Draghi maintains an optimistic outlook suggesting that a slowdown in the year to come is a foreseeable result to their concluded bond purchasing scheme that served its purpose to stimulate the economy and that the risks posed on the Eurozone stems from geopolitical tensions. Depending on how the economy performs, ECB’s stance on rate hikes will be on hold until next year. Due today is the release of Eurozone and Germany’s Manufacturing PMI.
The DAX index declined by less than 0.1% closing at 10,924.70 as it approaches a neutral territory ahead of cautious data. The main trend is bearish, however the recent upside move is put to question depending on whether the index forms a higher high above 11,008 as it tests key resistance levels around 10,990. The 100MA is acting as a decisive support and should clarify further direction for the index holding above it.
Support: 10861 / 10760
Resistance: 10886 / 10982