DAX It starts on the back of German dataEuropean stock markets have started the quarter with positive momentum, highlighting the focus on German inflation data that could influence the European Central Bank's next decision. Germany's economic performance is usually a key indicator for the eurozone as a whole. The return of investors to the market after the Easter holidays has contributed to the moderate rise of the indices, especially in sectors such as technology, insurance and banking have reported good figures. As an example, the DAX (Ticker AT: GER40) has experienced a 0.3% increase, with expectations on consumer price data to be released today at noon, an increase of 2.2% y-o-y is anticipated compared to 2.5% in the previous month. The German economy is considered the inflation barometer for the Eurozone, and this Wednesday we may hear from the ECB on what will happen to inflation.
From a technical perspective, the DAX has shown steady growth in recent weeks, with a breakout from its strongest trading zone that could easily be anticipated given that it was experiencing unstoppable growth in its price and trading volumes. The price bell analysis suggests a figure that diversifies into five marked price areas with a special concentration around 17,895 points, while the RSI indicates a trading of 46.18%, below the 200-day average at 59.02%. This could suggest a possible correction or consolidation in the previous price zone, with a maximum retracement level expected around 18,041.34 points (the high zone of the previous trading range) .
Fibonacci retracement analysis suggests that the market may not extend much beyond 1 which is its current zone, and contract towards 0.786 found at 18,447 points. In summary, the German market will remain a key driver of the index and it will be key to see if Germany continues to push exports and increase its domestic consumption, with possible bullish scenarios if the all-time highs of 18,603.47 points are breached if this scenario holds true, or corrections expected otherwise, with testing levels at lower support zones with the downside limit being 18,039.42 points.
Ion Jauregui - AT Analyst
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