DAX index faces challenges as data trigger losses

Latest statements from ECB officials

The German DAX index opened the fourth session of the week with a slight decline, trading near the 15855 point level, continuing a series of losses since the beginning of the week's trading.

Joachim Nagel, a member of the European Central Bank and Governor of the German Central Bank, stated that the bank will need to raise interest rates several times and then keep them stable for some time before completely controlling high inflation rates.

He also emphasized that the European Central Bank has not yet finished tightening its monetary policy, as there will be a need for further interest rate hikes to achieve a sufficiently restrictive level, so that the European Central Bank can continue to fight inflation rates.

Adding to the market unease, the manufacturing purchasing managers' index in Germany recorded a negative reading of 42.9 points, marking its lowest level since May 2020. However, there was a glimmer of positivity in the services purchasing managers' index, which rose to 57.8 points, indicating some resilience in that sector.

The European stock market, including the DAX index, also faced pressure from the lack of progress in negotiations to raise the US debt ceiling. This dampened investor sentiment and contributed to the overall decline in European stock indices. The UK's FTSE index witnessed a slight decline, while the French CAC index experienced a more significant drop.

The UK's FTSE index opened today's session with a limited decline, trading near 7,621 points,after the index fell more than a percentage point during the previous session, while the French CAC index fell significantly, trading near the 7,260 point level.

Pivot Levels

After the DAX index managed to rise to the 16,330 point level, it rapidly declined and broke the support level of 16,000 points, extending its decline to record its lowest price today at 15,725 points.

To regain momentum, the index needs to maintain support at 15,650 points, which would signify an intention to rise and potentially test the resistance level at 16,000 points.

However, if the index falls below the support level of 15,650 points and prices remain below this level, the decline may extend further to test the support level of 15,280 points after breaking through the level of 15,500 points.

If the index succeeds in surpassing the resistance level of 16,000 points again, this may contribute to extending the index's rise to test the highs of 16,330.