German DAX Index: Ongoing Downside Correction

On Monday, German DAX Index slumped 3.7% as major constituent SAP downgraded its full-year outlook...


On Monday, German DAX Index slumped 3.7% to 12,177, as investors were caught by surprise that SAP, a software maker and a major constituent of the index, has downgraded its full-year outlook due to weaker-than-expected demand recovery. 

Investors were deeply concerned with the spike in new COVID-19 cases in the U.S. and Europe. Meanwhile, U.S. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi failed again to agree on a fiscal stimulus deal.

On a daily chart, downside correction of the DAX Index is still ongoing as it has broken below its September's low. Previously, it has broken below a bearish rising wedge pattern and the relative strength index showed bearish divergence. The level at 13,066 might be considered as the nearest resistance, while the 1st and 2nd support are expected to be located at 11,600 and 10,860 respectively.

Source: Gain Capital, TradingView

Build your confidence risk free

More from Indices

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.