Current trend

The German stock market continues its downward correction, the main driver of which is expectations regarding further interest rate increases in the EU. Against this background, the quotes of the leading index of the Frankfurt Stock Exchange DAX 40 are held around 15909.0.

The tightening of monetary policy by the European Central Bank (ECB) has an impact on investment volumes, which may eventually lead to a recession in the region's economy. This was stated by the head of Deutsche Bank AG and concurrently the president of the Association of German Banks Christian Sewing. According to him, in the near future, the European regulator intends to raise the interest rate again from the current 4.00%, which could lead to serious consequences for the economy by the end of the year.

Against the background of high borrowing costs, the yield of 10-year German bonds is 2.3565%, which is 0.36% lower than on yesterday's placement, and 20-year securities are trading at a rate of 2.469%, having lost 0.52%.

The growth leaders in the index are Zalando SE ( 2.39%), Siemens Energy AG ( 2.30%), Commerzbank AG ( 2.13%), Vonovia SE ( 2.01%).

Among the leaders of the decline are Sartorius AG (-5.13%), Merck KGaA (-3.54%), Qiagen NV (-2.25%).

Support and resistance

On the daily chart, the price continues to trade in an uptrend, holding near the support line of the global corridor with dynamic boundaries of 17700.0–15900.0.

Technical indicators have reversed and issued a new sell signal: the fast EMAs on the alligator indicator are moving away from the signal line again, and the AO histogram, being in the sales zone, continues to form correction bars.

Support levels: 15700.0, 15360.0.

Resistance levels: 16050.0, 16350.0.

Trading tips

If the asset reverses and declines and the price consolidates below the local support level of 15700.0, short positions can be opened with a target at 15360.0. Stop-loss – 15900.0. Implementation time: 7 days and more.

If the asset continues local growth and the price consolidates above the local resistance level of 16050.0, long positions will be relevant with a target at 16350.0. Stop-loss – 15900.0