DAX 30, CAC 40, FTSE 100 Forecast:
- A breakdown in US-China trade talks has spooked markets and revived volatility[1]
- Elsewhere, a burgeoning US-French trade spat has rattled the CAC 40[2]
- Now, the three European indices are clinging to their respective support levels
DAX 30, CAC 40, FTSE 100 Outlooks Cling to Support as Bears Emerge
European indices were dealt a blow on Tuesday as the United States announced it would pursue retaliation against France[3] for its digital tax on US tech companies alongside a considerable deterioration in US-China trade talks. Together, the trade headwinds served to undermine risk appetite and erode the recent rallies enjoyed by the DAX 30[4], CAC 40 and FTSE 100[5]. While market participants attempt to discern the exact impact of the news, traders may look to nearby technical levels for influence in the interim.
DAX 30 Forecast
The DAX 30 fell from an area of technical confluence on Monday – a zone it had straddled for the entirety of November. Now, the German equity index is looking for secondary support beneath as it looks to consolidate October’s gains after erasing the majority of November’s in a single session. Last week, I cautioned that further consolidation may be necessary[6] and highlighted horizontal support around 12,800 as an area of importance. Trading at 13,000 flat at the time of this article’s publication, 12,900 could prove to be the index’s next target if bearishness continues, but the conviction of the initial move suggests that further selling could be afoot.
DAX 30 Price Chart: Daily Time Frame (April 2019 – December 2019) (Chart 1)
Should further selling materialize, subsequent support becomes few and far between. 12,800 is still worthy of mention,
