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DAX index advanced to its record highs this Wednesday. Here are the next targets

By: Invezz
DAX index advanced to its record highs this Wednesday. Here are the next targets

European shares advanced this Wednesday, supported by expectations that the European Central Bank will maintain its monetary policy unchanged. DAX index has advanced to its record highs, but further turmoil should not be discounted despite this.

The European Central Bank will present fresh growth forecasts this week and decide whether to change the ongoing measures. Concerns amid the ongoing pandemic continue to worry investors, and for now, everything indicates that growth forecasts will likely be downwardly revised.

The EU published the final version of Q4 GDP, which was downwardly revised to -0.7%, but the positive news is that the EU Sentix Investor Confidence improved in March. The pandemic continues to take its toll, and the European Central Bank would probably support the economy for a while.

The degree of ECB’s concern about the economic situation will significantly influence stock markets in the near term; still, policymakers hope for an economic comeback in the second half of the year.

DAX index remains supported by positive economic data from Germany and by the fact that many companies reported better than expected earnings results recently. Germany reported that the January Trade Balance posted a surplus of €22.2 billion, which was above expectations.

Many analysts expect a rise in inflation as vaccine rollouts have led to a reopening of the economy, but the market still does not see this as a potential risk.

“The COVID-19-related restrictions have noticeably limited the consumption possibilities of private households, but for the current year, we now expect an increase in the consumer price index to 2% Y/Y. Combined with the current macroeconomic backdrop of ultra-expansionary monetary and fiscal policies that are likely to reverse later rather than sooner, these factors could, in the worst case, lead to structurally higher inflation dynamics, “Deutsche Bank reported.

Technical analysis: DAX index continues to trade in a buy zoneData source: tradingview.com

DAX index advanced to its record highs this Wednesday, and if the price jumps above 14,600 points, the next target could be around 14,700. According to the technical analysis rules, 13,000 points now represent a powerful support level, and as long the price is above this support, there is no indication of the trend reversal.

Summary

The German Dax has advanced to its record highs this Wednesday, but further turmoil should not be discounted despite this. This index continues to trade in a bull market, and if the price jumps above 14,600 points, the next target could be around 14,700 points. The European Central Bank’s decision on monetary policy is the most relevant event of this trading week, and according to estimates, ECB will maintain its monetary policy unchanged.

The post DAX index advanced to its record highs this Wednesday. Here are the next targets appeared first on Invezz.

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