- June 26, 2018
- Posted by: Trading
- Category: Alerts
DAX 30 News and Talking Points – Trade Wars and German Immigration
– US President Trump is not backing down on trade tariffs and risk markets are getting roiled.
– German Chancellor Angela Merkel has little time left to finalize her migrant plans.
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DAX 30 Steadies but Further Losses are likely on the Horizon
US President Donald Trump’s aggressive trade tariffs continue to feed through into the market, hammering equity and risk-asset valuations sharply lower. On Monday the German automobile sector came under fire with President Trump threatening to place a 20% tariff on the sector if EU trade barriers are not removed. While the trade war situation has been around for some weeks, another hurdle for the DAX – and Eurozone risk in general – is the discord within German Chancellor Angela Merkel’s coalition government as rifts over migration widen. Germany’s interior minister Horst Seehofer has threatened to turn away migrants unless Merkel can come up with a European solution by the weekend, a stance at odds with the Chancellor. A split within Merkel’s coalition government would then be likely and force a new round of elections.
The current, small rebound in the index looks unlikely to hold and further falls are expected. On the downside the area around 11,700 should hold in the short-term. The 38.2% Fibonacci retracement of the February 2016 – January 2018 rally is at 11,727 while there are also a cluster of recent lows between 11,680 and 11,720. The RSI indicator is heading into oversold territory while the MACD is below the signal line.
DAX 30 Daily Price Chart (May 2017 – June 26, 2018)
What’s your opinion on the DAX? Share your thoughts with us using the comments section at the end of the article or you can contact the author via email at Nicholas.email@example.com or via Twitter @nickcawley1
— Written by Nick Cawley, Analyst