Germany 40 CFDShort
DAX in false break reversal
Global stocks sold off further after the European Central Bank warned of more rate increases at the pace of 50 basis points, adding to a hawkish tone from the Federal Reserve the day before.
Among the more interesting indices to watch is the German DAX.
After faking out above the previous high at 14605, the DAX hasn't looked back, selling off aggressively over the past couple of days.
Today, the German index broke below the recent low at 14192, before plunging further lower. This level is now going to be the most important short-term resistance going forward. For as long as this hold on any bounces, the path of least resistance would remain to the downside.
Support comes in around 13975, which was being tested at the time of writing. This was previously resistance. I would expect to see at least a bit of a bounce from this level given today's sharp selling.
But the damage is done. Stocks are likely heading lower for a while now, with all the major central banks out of the way and their main message being that interest rates will rise further and stay high for longer than the markets had assumed. Also, with concerns about growth intensifying, investors will find it difficult to justify buying stocks at these lofty levels.
By Fawad Razaqzada on behalf of FOREX.com
Among the more interesting indices to watch is the German DAX.
After faking out above the previous high at 14605, the DAX hasn't looked back, selling off aggressively over the past couple of days.
Today, the German index broke below the recent low at 14192, before plunging further lower. This level is now going to be the most important short-term resistance going forward. For as long as this hold on any bounces, the path of least resistance would remain to the downside.
Support comes in around 13975, which was being tested at the time of writing. This was previously resistance. I would expect to see at least a bit of a bounce from this level given today's sharp selling.
But the damage is done. Stocks are likely heading lower for a while now, with all the major central banks out of the way and their main message being that interest rates will rise further and stay high for longer than the markets had assumed. Also, with concerns about growth intensifying, investors will find it difficult to justify buying stocks at these lofty levels.
By Fawad Razaqzada on behalf of FOREX.com
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