DAX: Recovery likely after German political risks ease

Market Analysis /
Milan Cutkovic / 03 Jul 2018

Germany´s interior minister Seehofer announced earlier that a deal has been reached regarding the tightened border controls that he was demanding. His threats to quit led to fears that Merkel´s government is on the brink of collapse. Such a scenario would have been catastrophic, with the renewed political uncertainty hurting business confidence and the stability of the European Union.

While a potential trade war and concerns about the political situation in Italy continue to weigh on sentiment, investors - especially in Germany - are now relieved. This opens the door for a recovery rally in the DAX, which has been suffering in recent weeks.

A clear break above the falling trendline from the June high would pave the way for another test of the 12.500 resistance level. There, the DAX is likely to struggle somewhat. Should the index manage to overcome that hurdle as well, the next bull target would lie around 12.720 points (200 DMA).

DAX
DAX

The information provided here has been produced by third parties and does not reflect the opinion of AxiTrader. AxiTrader has reproduced the information without alteration or verification and does not represent that this material is accurate, current, or complete and it should not be relied upon as such. The Information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any particular trading strategy. Readers should seek their own advice. Reproduction or redistribution of this information is not permitted.

More on this topic

See More News

Open your account. Trade within minutes.

Start your trading journey with a trusted, regulated, multi-award winning broker.

Open Account Try Free Demo