DAX: ECB has disappointed

Mario Draghi´s announcement of additional monetary stimulus was less than what the financial markets had expected. Due to this the German stock market declined sharply.

Source: Bloomberg

The DAX fell down below the Fibonacci retracement (38.2 per cent) at 11,224, the 200 days simple moving average (SMA) at 11,105, the psychological support at 11,000 and the upper trend line of the short term downside trend channel at 10,960. Furthermore the 50% retracement at 10,861 and the 200 days weighted moving average (WMA) at 10,810 were broken down.

We see further downside potential to the next Fibonacci retracement (61.8 per cent) at 10,494 on daily basis. Below this level the midterm upward trend line at 10,140 could be the next target on the way south.

The return in the downside trend channel was a disappointment from the technical point of view. Above the highs at 11,431/11,434 the upward movement could continue. The Fibonacci retracement (23.6 per cent) at 11.684 would be the target price.

German stock market DAX on daily basis

DEM_DAXchart 041215
Source: IG charts

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