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The DAX 40 index fell on geopolitical concerns raising the demand for refuge -by Ecork

  • Safe-haven demand returns as uncertainty between the US and China weighs, and Pelosi prepares to land in Taiwan.
  • European semiconductor stocks decline.

What is earnings season and what to look for in earnings reports

DAX 40: Pull back due to geopolitical concerns sparking haven demand

The DaxEuropean trade fell as weak global factory data fueled slowdown fears, while uncertainty prevailed US House Speaker Nancy It was Pelosi Designation To visit Taiwan. These developments come Manufacturing PMI data From United StateEurope and Asia, released over the past two days, showed a slowdown in factory activities in July, adding to recession fears.Moody’s Investors Service has pointed to increased risks of stagflation in the European Union. However, losses were limited as quarterly corporate earnings continued to provide support.

US House Speaker Nancy Three sources said Pelosi was due to visit Taiwan on Tuesday, where the United States said Chinese threats would not scare her not to “stand idly by” if she makes a trip to the self-governing island claimed by Beijing.. Such a move would raise tensions between the world’s two economic superpowers, which Chinese Foreign Ministry spokesman Zhao Lijian said Monday would lead to “very serious developments and consequences.” The fear of a possible visit is reflected in European semiconductor shares, which are down between 0.6 and 3.6% in early trading. Most of the global chip production takes place in Asia, so any escalation or increase in uncertainty regarding the geopolitics of the region could lead to chip shortages or sharp price increases.

Another fear in this regard falls on Taiwan StraitWhich It is the primary route for ships passing from China, Japan, South Korea, and Taiwan to the west, carrying goods from Asian factory centers to markets in Europe, the United States and all points in between. Nearly half of the global container fleet and 88% of the world’s largest ships by tonnage passed through the waterway this year, according to data compiled by Bloomberg. With supply and demand issues emerging globally, this is the last thing the markets need to regain some calm.

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DAX 40 Daily Chart – August 2, 2022

Source: IG

From a technical perspective, last week saw the closing of the monthly candle as a bullish candle for the support level. We closed above the 50-SMA while maintaining a Bullish structure (higher highs and higher lows) on the monthly time frame. daily time frame saw Doji candlestick Yesterday closed as sentiment turned in the US session. We are currently trading between 50 and 100-SMA With 13,300 providing great daily support. We maintain a bullish structure on the daily chart, while a breakout and close of the candle just below the most recent high 13030 low will result in a change in the structure.

DAX 40 1H Chart – Aug 2, 2022

The DAX 40 index fell on geopolitical concerns raising the demand for refuge

Source: IG

The 1H on the graph On the other hand experienced an outbreak trend line It was followed by a pullback last week before moving higher. Yesterday we created a new high at 13571 before a sharp pullback made us give up today’s gains. We just bounced off the important daily support level at 13350 which coincides with the 100-SMA. With choppy market conditions remaining, the range between yesterday’s high and intraday support may provide an opportunity, while a break below support opens the possibility of further rebound towards the trend line.

Key levels to watch during the day:

Support areas

13350

13275

13150

resistance zones

13571

13750

14000

Written by: Zain Fouda, Market Writer for DailyFX.com

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