No fiscal stimulus from the US (yet) and new lockdown fears – DAX back below 13,000

By Admiral Markets

Source: Economic Events October 19, 2020 – Admiral Markets’ Forex Calendar

After the German DAX30 took a serious hit last week on Thursday, breaking below 12,950 and even 12,770/800 points, it’s difficult to spot a clear reason for the short-term sell-off.

Most likely it seems as if it was a combination of rising fears of a second Coronavirus lockdown over the European continent, after the situation in Spain and France started to significantly worsen again, as well as in Germany where Coronavirus cases spiked significantly in recent days.

In addition, Republicans and Democrats are still fighting over an economic relief package and there are fewer signs that they will reach a deal before the US presidential election on November 3rd.

What is positive, from a technical perspective, is that the DAX30 didn’t break below 12,500 points, which would level the path down to 12,200 points, a region where we can also find the SMA(200) on a daily time-frame.

What needs to be seen now is whether the bullish run into the last weekly close above 12,800 points is sustainable: if so, it needs to be seen how the DAX reacts against the 12,950 point region, even though we have to say that only a sustainable push back above last week’s Wednesday highs around 13,050 points technically brightens the picture on H1:

Source: Admiral Markets MT5 with MT5SE Add-on DAX30 CFD Hourly chart (between September 28, 2020, to October 16, 2020). Accessed: October16, 2020, at 10:00 PM GMT

Source: Admiral Markets MT5 with MT5SE Add-on DAX30 CFD Daily chart (between May 27, 2019, to October 16, 2020). Accessed: October 16, 2020, at 10:00 PM GMT. Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2015, the value of the DAX30 CFD increased by 9.56%, in 2016, it increased by 6.87%, in 2017, it increased by 12.51%, in 2018, it fell by 18.26%, and in 2019, it increased by 26.44%, meaning that in five years, it was up by 34.2%.

Check out Admiral Markets’ most competitive conditions on the DAX30 CFD and start trading on the DAX30 CFD with a low 0.8 point spread offering during the main Xetra trading hours.

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By Admiral Markets