DAX reliant on moving average support

European equity markets started the week off on loose footing with little economic guidance until Thursday.

Chart screen
Source: Bloomberg

Memories the DAX had of battling with the 10,000 level look unlikely to be an issue for some time, as equities start the week on the same footing they closed out on last week.

The last ten days have seen the DAX fluctuate as it used the 100-day moving average as a crutch, however the burden of negativity looks to have been too much today. The DAX only has three companies currently in the green, with Commerzbank heading up the list of fallers. Once again, worries over German banks have resurfaced.

The events that have unravelled over the last three days in Ukraine have once again highlighted the dependency that Germany has on Russia for its energy supplies. Due to this imbalance of dependency, we have seen a somewhat mixed message coming from the eurozone.

As my colleague Chris has pointed out, the 9600 level has proven to be an attractive enough level to entice the buy-on-dip traders back in. The longer-term trending support is more closely aligned with the 200-DMA, around the 9560 level. Only a test of this would see a change in current thinking.

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