DAX Weekly Price Analysis – DAX Has a Tough Week as Rates Show Fear

DAX Technical Analysis

The DAX in Germany has shown itself to be a bit hesitant to continue going to the upside, and in fact, at this point in time, it is a market that is testing a fairly significant support level. The market breaking down below the 24,000-euro level and sticking below there could open up a move to the 50-week EMA at 23,578 euros, followed by an even deeper correction to 23,000 euros and we would still basically be in consolidation.

It is worth noting that interest rates are rising not only in Germany but in America, showing that there is real concern out there when it comes to the global economy and the supply chain. This is a recurring theme as we are looking to figure out what to do next.

Interest Rates and Market Volatility

The 10-year in Germany is reaching towards 3.14%, which is pretty high. You can see in the United States they are well over 4.5%. This is going to be bad for equities, and therefore, it should not be a surprise at all to see if we pull back from here.

The question is how long this lasts, and the answer probably has to do with people in the Middle East. In other words, nobody knows. Right now, it certainly looks like the DAX looks a little heavy after trying to be very bullish during the previous week, and I think this might be a harbinger for the rest of Europe. Be cautious, recognize that we are at a very important area of inflection.

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