The DAX Index ended sharply lower and fell by 1.58% as a negative earnings report from an auto member added onto the downward pressure prompted by Sino-US trade tensions. A US trade official reportedly confirmed that President Trump’s tariff threats on China would be delivered on Friday and weighed on the prospect of a trade agreement between the two nations. In terms of data, , the Eurozone downgraded Germany’s growth forecast to 0.5% while German factory orders came well below its estimate however showed a positive reading for the first time this year. Today, Germany posts industrial production data which is forecasted negatively and is unlikely to impact the DAX any more than US-China headlines as Germany’s heavy reliance on trade puts it in a vulnerable position. Should there be no news of relief on US-China trade relations, today’s trading session could carry the prevalent pessimism across markets.
The DAX index failed to surpass the 20-period MA and declined below the support at 12150 to establish a new low at the 12030 level before ending at 12092. Given that price has broken through several support levels, a bearish view is in place and the DAX looks poised for further declines. A move above the 20-period MA around 12250 would be required to indicate buying pressure, while a sustained move below 12150 would leave the DAX ranging before a decline below 12030 could accelerate selling pressure towards the support at 11970.