The main European indices closed the last week negative a week marked by deepening concern for the Chinese economy (Ticking bomb) after the disclosure of the manufacturing PMI indicator below the estimated. Constraining the European indices is also the resignation of the Greek Prime Minister Alexis Tsipras as the country heads for an early election in September.
A closely watched survey indicates German consumers are beginning to worry more about the country’s economic situation but remain optimistic overall. The GfK research group reported last week that its forward-looking consumer climate index dropped to 9.9 points for September from 10.1 points in August. Still, GfK says the indicator remains high and that the drop does not suggest “that the economic motor will stutter or even stall.”
The Index plunged more than 9.0% since the start of the month and rose 2.4% year to date and changed its phase from warning to distribution. Last week, DAX30 plunged to close near the low of the week, on a wide range with extremely high volume. The stochastic is showing a bearish momentum and is below the 50 mid line.
Expecting a downward move to 2015 low at 9,701.9 on a break below a weekly support at 9,849 (scenario 1) or a bounce from a weekly support at 10,054.5 may push upward the Index to a key level at 10,652.5 (scenario 2).
Ger30 is a CFD written over DAX30 futures.