The DAX 30 continues to fall ahead of the ECB meeting. Since October 2020, oversold circumstances have been at an all-time high. As markets strive to figure out what to do next, the DAX 30 continues to come back from recent highs. As more countries strive to return to normalcy, the reopening of trade is making progress, but there are still huge concerns about development, which is keeping the pace constrained. Markets are also paying close attention to central banks’ responses to present pricing pressures, as they fear that premature monetary stimulus would stymie economic recovery. Some members of the Federal Reserve and the Bank of England have already become more hawkish, and the ECB will give its latest guidance on Thursday. I don’t think there’s much chance of a policy shift at this meeting, especially since the bank just amended its inflation guideline to better reflect the Eurozone’s economic condition, removing the 2% inflation cap and enabling the economy to flourish before growth restrictions are imposed. However, as price pressures continue to grow, the ECB may appear more hawkish in their statements, putting more pressure on the DAX 30.
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Daily chart of the DAX 30 index
The DAX 30’s decline has accelerated since last week, with the index now trading around 15,280, a two-week low. We may see some short-term support around 15,300 to correct some of the oversold circumstances before the selloff intensifies further, as the stochastic oscillator is at its most negative since October 2020, with the MACD dragging deeper into the red. The decline below the ascending trendline has made it more difficult for buyers to maintain momentum, thus the index would need to trade back above 15,700 to consider a continuation of the positive bias. If the DAX 30 goes below the 15,000 level, sellers may seize control. Learn more about the fundamentals of the stock market here, or download one of our free trading guides. —- Market Analyst Daniela Sabin Hathorn contributed to this article. Daniela’s Twitter handle is @HathornSabin.
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