European Indices fell sharply on Friday with the DAX posting a loss of 1.6%. Market participants attributed the drop to global growth concerns following weak PMI data from Europe. The German Manufacturing PMI figure painted a gloomy picture for the region’s largest economy as it fell to a six year low of 44.7. Investors shifted to a risk off mode which led to a German treasury yield to turn negative due to uncertainty over slowing growth in the Eurozone and Brexit. The pessimistic outlook has dominated sentiment and investors will monitor Brexit and Sino-US trade news to influence near-term direction.
The DAX index extended downside pressure past the 11480 level to end at 11364 on Friday. Should the price sustain below the 11380 level, bearish momentum should drive the index to support at 11250 from which lower levels will be targeted. On the other hand a move above the 11380 level may bring about a test on the resistance at 11480.