DAX Fails to Recover from Opening Plunge

June 29, 2015 – Germany 30, representing the benchmark DAX index, gapped down at the open of trading on Monday due to investors’ collective anxiety regarding the developing financial crisis in Greece.

Shortly after hitting an intraday low of 10,857 in the first hour of trading on Monday, which approached recent support lows around the 10,800 level, the index attempted to stage a rebound. While more than half of the opening gap was filled by afternoon trading on this rebound, price action soon began to falter and retreat back down towards its lows.

From a broader perspective, the DAX is still trading within a downside correction from its record high around the 12,400 level this past April. After Monday morning’s drop, the index had traded down to more than 12% below its all-time high.

The latest rebound within this correction occurred in the past week, when the index climbed to a key downtrend line and resistance level around 11,650 before pulling back once again. That resistance level also represented the 50% retracement of the downside correction from April’s noted 12,400-area high down to mid-June’s noted 10,800-area low.

With any further turmoil emerging from Greece this week, the key downside level to watch would be this 10,800 support level. In the event of a sustained breach below this key level, the index could begin making its way further down towards support objectives at 10,500 and 10,100.

To the upside, the noted 11,650 level should continue to serve as strong resistance on any rebounds within the current downside correction.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.