German DAX Index: Ongoing Downside Correction
George Lam October 27, 2020 10:27 AM
On Monday, German DAX Index slumped 3.7% as major constituent SAP downgraded its full-year outlook...
On Monday, German DAX Index slumped 3.7% to 12,177, as investors were caught by surprise that SAP, a software maker and a major constituent of the index, has downgraded its full-year outlook due to weaker-than-expected demand recovery.
Investors were deeply concerned with the spike in new COVID-19 cases in the U.S. and Europe. Meanwhile, U.S. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi failed again to agree on a fiscal stimulus deal.
On a daily chart, downside correction of the DAX Index is still ongoing as it has broken below its September's low. Previously, it has broken below a bearish rising wedge pattern and the relative strength index showed bearish divergence. The level at 13,066 might be considered as the nearest resistance, while the 1st and 2nd support are expected to be located at 11,600 and 10,860 respectively.
Source: Gain Capital, TradingView
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