Current trend

The leading index of the Frankfurt Stock Exchange DAX 40 corrected at around 16098.0. The main driver of negative dynamics is the expectation of further tightening of monetary policy by the European Central Bank (ECB).

The increase in the cost of borrowing in the EU is likely to continue. This is evidenced by yesterday's report on consumer prices in the euro area, which showed a reduction in inflation from 6.1% to 5.5%, while the Core CPI rose again, this time from 5.3% to 5.5%. Another increase in net inflation indicates insufficient monetary pressure on prices, which is likely to lead to another interest rate adjustment at subsequent meetings of the European regulator, the nearest of which will be held next week.

In turn, the yield of 10-year German bonds is 2.400%, which exceeds yesterday's figure by 0.13%, and 20-year bonds are traded at a rate of 2.513%, which is 2.52% higher than in mid-June. In addition, yesterday an auction for a placement of 30-year bonds was held, the yield of which amounted to 2.400% after 2.360% at the previous placement.

The growth leaders in the index are Vonovia SE ( 6.88%), Sartorius AG ( 2.08%), Zalando SE ( 1.61%), Deutsche Bank AG ( 1.58%).

Among the leaders of the decline are Covestro AG (-2.90%), Daimler Truck AG (-1.32%), Munich Re Group (-1.28%).

Support and resistance

On the daily chart, the price is trading in an uptrend, falling towards the support line of the global corridor with dynamic boundaries 17500.0–15700.0.

Technical indicators have reversed once again and are holding a weak sell signal: fast EMAs on the Alligator indicator are moving away from the signal line, and the AO histogram, being in the buy zone, continues to form descending bars.

Support levels: 15900.0, 15500.0.

Resistance levels: 16250.0, 16630.0.

Trading tips

If the asset reverses and continues declining and the price consolidates below the local support level of 15900.0, short positions can be opened with the target at 15500.0. Stop-loss — 16100.0. Implementation time: 7 days and more.

If the asset continues growing locally and the price consolidates above the local resistance level of 16250.0, long positions will be relevant with target at 16630.0. Stop-loss — 16100.0.