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The German DAX (GER40) index extended its upward trajectory on Tuesday, closing at 19,946.15, reflecting a 1.45% gain.
The index’s bullish momentum aligns with a broader risk-on sentiment in global equities, driven by improving U.S. economic data and easing concerns around eurozone economic resilience.
With that in mind, consolidation below the psychological 20,000 mark hints at caution ahead of upcoming macroeconomic data releases.
A broader rally in equities appears supported by stronger-than-expected U.S. manufacturing data, which eased concerns of an imminent slowdown in global demand.
This sentiment has trickled into European markets, though market participants remain cautious in light of ongoing political uncertainty in France. GER40’s performance suggests that traders are managing these risks with opportunities stemming from positive external drivers.
Picture: Picture: GER40 climbs towards 20,000 resistance, reflecting bullish market sentiment, as seen on the VT Markets app.
Looking at the chart, GER40’s bullish momentum remains intact. Short- and medium-term moving averages (5-period and 10-period) have crossed above longer-term averages, supporting the uptrend.
Immediate resistance is evident at 20,000, a level that, if broken, could push the index toward the next target around 20,150. Support lies at 19,900 and further at 19,850, areas that could come into play if traders opt to lock in profits amid uncertainty.
See also: Week Ahead: Fed Policy Faces December Labour Test
Looking ahead, traders are focused on Friday’s U.S. non-farm payrolls data, which will shape expectations for the Federal Reserve’s next policy move.
The euro’s weakness remains a wildcard. A softer euro has enhanced export competitiveness, but prolonged uncertainty could weigh on eurozone stability, potentially capping further upside for the DAX.
On a global scale, China’s slowing economy and the yuan’s depreciation to a one-year low could introduce new risks for European exporters with exposure to Chinese markets.
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