Since the DAX reached its all-time high at just over 12950 points in mid-June, Germany’s leading index has dropped below the psychologically important 12000 mark at times. A strong euro, mixed business figures and growing geopolitical tensions, together with smaller summertime volumes, have led to a continuing decline in the DAX. With the summer now coming to an end, important dates like the central bank meetings of the ECB and the Fed are coming up on traders’ calendars in September.
The situation on the charts continues to look as strained as ever. On the first attempt, the index was again unable to overcome the downward trend mentioned earlier, which has currently reached 12270 points. And only slightly above that line is the resistance level at 12315 points, which has already proven to be an insurmountable barrier for the DAX in the past few weeks. If it fails to break through that resistance again this time, we are likely headed towards the key support level at 12000 points. In addition, there is still enough room in the descending channel at present for a setback to as low as 11800 points.
If the downward trend at 12270 points and the resistance at 12315 are broken upward, however, then resistance levels at 12400, 12500, and 12680 points still stand in the way of a new record high.
The path to new heights looks like a rocky one at the moment. However, a decision on the direction of trading for the next few weeks is likely to come this week with the Jackson Hole central bank symposium, which takes place from 24–26 August.