DAX Stalls Near Cycle Lows

When writing, the index traded 0.5% higher on the day, hovering near 12,600 EUR as the critical support of 12,450 EUR has been defended so far.

A batch of EU data

Earlier in the day, as per official data issued by Eurostat, retail sales in the Eurozone climbed by 0.2% monthly in May compared to a 0.4% projected gain and a 1.4% decline in April. As a result, annualized Retail Sales for the bloc were 0.2% in May compared to 4.0% in April and 5.4%.

Additionally, the manufacturing sector downturn in Europe’s economic powerhouse appears to be leveling, according to a recovery in German factory orders in May.

According to the most recent statistics released by the Federal Statistics Office on Wednesday, factory orders increased by 0.1% over the course of the month compared to -0.6% predicted and -2.7% previously.

Germany’s industrial orders decreased by -3.1 percent in the reporting month compared to the previous one, or -6.2 percent on an annualized basis.

“For the last several months, the market’s been watching the economy choke on inflation,” Matt Kishlansky, GenTrust Head of Asset Allocation, told Yahoo Finance Live. “There’s really no consensus between the stock market and the bond market as to what we do in the interim and where we’re headed.”

Double bottom, falling wedge?

It looks like the DAX index could be bottoming in a double bottom pattern, usually a solid bullish reversal formation. Additionally, it might be creating a falling wedge triangle, also a bullish shape.

On the other hand, the fundamental situation remains exceptionally bearish, but short-term oversold rallies cant be ruled out.

Thus, if DAX trades above 12,450 EUR, traders might try buying the index, with a target of 13,000 EUR.