DAX40 responds boosted by Elections
By Ion Jauregui - Analyst ActivTrades
The German DAX stock index has experienced a remarkable upward momentum today. The results of the German federal elections have generated optimism in the markets. The strength shown by the CDU/CSU, reaching 28.5% of the vote and positioning Friedrich Merz as a key figure, has reinforced the expectation of a stable, pro-business government. This outcome has been well received by the markets, as greater political and economic stability is anticipated in the country, a fact that has been reflected in the DAX, which has risen more than 0.7% at the start of the day, as investors are confident that a predictable political environment will favor the economy and strategic sectors, such as automotive and technology. At the same time, the euro has reached its highest level in a month, trading at $1.0528 against the dollar. This appreciation of the European currency reflects the renewed confidence in the German economy and the euro zone in general, following the election results.
However, despite the initial enthusiasm, there are some challenges ahead. The new coalition government will have to address issues such as economic stagnation and external pressures, including U.S. trade policies. The ability of the new government to implement fiscal and economic reforms will be crucial to maintain market confidence over the long term.
In the first hours of trading, the DAX registered an increase of more than 1.54%, reaching 22,584.80 points in the first hours of pre-market trading prior to the opening. This optimism is partly due to the expectation that the CDU/CSU will form a “grand coalition” with the SPD, thus avoiding the participation of extreme right-wing parties such as AfD, which obtained 20.8% of the votes. The possibility of a stable, pro-business government has strengthened investor confidence. The automotive sector has been one of the biggest beneficiaries in this context. Manufacturers such as BMW and Volkswagen have experienced increases in their shares of 2% and 1.6%, respectively. In addition, companies such as Deutsche Bank and SAP have also shown positive returns in the market.
Looking at the chart, the support of the last impulse is located at 21,950 points, with the current support at 22,115.26 points. The current high is around 22,945.01 points. Today the mood begins with strength in Europe, so we will have to see if this positivism is transferred to the rest of the day, although it does not seem that in the opening hours the enthusiasm has been maintained. If we look at the value of the current control point is located around 22517 points. RSI is slightly oversold at 44.48%. Relying on last Thursday's checkpoint. The crosses of averages seem to be showing a possible crossing of the 50 and 100 average. If this happens, a price drop to the support zone to test price would be foreseeable. If this does not happen we may see a new test of the current high resistance.
In summary, the DAX has reacted positively to the election results in Germany, driven by the prospect of greater political stability and a pro-growth government. However, it will be essential for the new administration to effectively address economic and geopolitical challenges to sustain this momentum going forward.
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
The German DAX stock index has experienced a remarkable upward momentum today. The results of the German federal elections have generated optimism in the markets. The strength shown by the CDU/CSU, reaching 28.5% of the vote and positioning Friedrich Merz as a key figure, has reinforced the expectation of a stable, pro-business government. This outcome has been well received by the markets, as greater political and economic stability is anticipated in the country, a fact that has been reflected in the DAX, which has risen more than 0.7% at the start of the day, as investors are confident that a predictable political environment will favor the economy and strategic sectors, such as automotive and technology. At the same time, the euro has reached its highest level in a month, trading at $1.0528 against the dollar. This appreciation of the European currency reflects the renewed confidence in the German economy and the euro zone in general, following the election results.
However, despite the initial enthusiasm, there are some challenges ahead. The new coalition government will have to address issues such as economic stagnation and external pressures, including U.S. trade policies. The ability of the new government to implement fiscal and economic reforms will be crucial to maintain market confidence over the long term.
In the first hours of trading, the DAX registered an increase of more than 1.54%, reaching 22,584.80 points in the first hours of pre-market trading prior to the opening. This optimism is partly due to the expectation that the CDU/CSU will form a “grand coalition” with the SPD, thus avoiding the participation of extreme right-wing parties such as AfD, which obtained 20.8% of the votes. The possibility of a stable, pro-business government has strengthened investor confidence. The automotive sector has been one of the biggest beneficiaries in this context. Manufacturers such as BMW and Volkswagen have experienced increases in their shares of 2% and 1.6%, respectively. In addition, companies such as Deutsche Bank and SAP have also shown positive returns in the market.
Looking at the chart, the support of the last impulse is located at 21,950 points, with the current support at 22,115.26 points. The current high is around 22,945.01 points. Today the mood begins with strength in Europe, so we will have to see if this positivism is transferred to the rest of the day, although it does not seem that in the opening hours the enthusiasm has been maintained. If we look at the value of the current control point is located around 22517 points. RSI is slightly oversold at 44.48%. Relying on last Thursday's checkpoint. The crosses of averages seem to be showing a possible crossing of the 50 and 100 average. If this happens, a price drop to the support zone to test price would be foreseeable. If this does not happen we may see a new test of the current high resistance.
In summary, the DAX has reacted positively to the election results in Germany, driven by the prospect of greater political stability and a pro-growth government. However, it will be essential for the new administration to effectively address economic and geopolitical challenges to sustain this momentum going forward.
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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คำจำกัดสิทธิ์ความรับผิดชอบ
ข้อมูลและบทความไม่ได้มีวัตถุประสงค์เพื่อก่อให้เกิดกิจกรรมทางการเงิน, การลงทุน, การซื้อขาย, ข้อเสนอแนะ หรือคำแนะนำประเภทอื่น ๆ ที่ให้หรือรับรองโดย TradingView อ่านเพิ่มเติมที่ ข้อกำหนดการใช้งาน