At the beginning of today’s session, we have seen different macroeconomic data from Germany with a different sign. Despite the fact that we are able to verify that GDP has suffered a setback, consumer confidence has been better than the expectations of the market consensus.
Specifically, we have been able to observe that German GDP has suffered a decline of 1.8% during the first quarter of the year, causing the interannual GDP to fall into negative territory to 3.4% compared with the same period in 2020.
This decrease can be explained by the restrictive and prolonged measures that Merkel’s government took during the winter season to try to contain and halt the pandemic, which has produced a negative impact on consumption during the first quarter of the year, thus obtaining a result worse than expected by market consensus.
Such data contrasts with the positive results obtained in Germany in relation to present and future expectations, since the Ifo index of business confidence in this month of May has been established at the level of 99.2 points compared to the 98.2 points that was expected. In addition, the current situation indicator in Germany has also exceeded the market consensus expectations, reaching 95.7 points compared to the expected 95.5 points. Furthermore, the business expectations index for the next 6 months has also shown growth compared to the previous month, exceeding the expectations of the market consensus.
On the other hand, during yesterday’s session we obtained several statements from some members of the U.S. Federal Reserve in which they were quite optimistic in relation to inflation, since they expect these price peaks to decrease over time as we overcome this bottleneck phase caused by the reopening of the economy. Therefore, it seems that the current monetary policy will continue to be maintained, which can support the evolution of the indices.
If we look at the H4 chart of the DAX30, we can see that since mid-April, the price has been following a lateral movement, from which it seems that we are exiting, after the price made a double bottom formation where a new bullish momentum began. This has led it to set new all-time highs after exceeding 15,510 points, which act as the first level of support.
At the moment, given that the price is trading far from its main support levels, we cannot rule out that the DAX30 will make some correction to its 18 session average to create a new impulse. The loss of this level could open the doors to a greater correction, but the bullish structure would not be in much danger, so long as the price maintains the levels of its red band.
Source: Admiral Markets MetaTrader 5. DAX30 H4 chart Data range: March 2, 2021 to May 25, 2021. Prepared on May 25, 2021 at 12:50 CEST. Keep in mind that past returns do not guarantee future returns.
Evolution in the last 5 years:
- 2020: 3.6%
- 2019: 25.48%
- 2018: -18.26%
- 2017: 12.51%
- 2016: 6.87%
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