DAX 40: the German stock market consolidates on a key support

The DAX 40 is stalling on a key support at 19,000 points, but the outlook remains constructive above this threshold.

The German stock market consolidates in the face of uncertainty caused by the re-election of Donald Trump

The price of the DAX 40 continued its ups and downs last week after the landslide victory of Donald Trump and the Republicans. European markets have consolidated unlike American markets.

It must be said that the fallout from the new American president’s program risks being extremely weak, or even negative, for the rest of the world. Indeed, Donald Trump’s “America First” policy aims to increase tariffs on all American imports, suggesting an intensification of trade tensions, and to make American companies more competitive by lowering corporate taxes by 6 percentage points. at 15%.

Furthermore, Donald Trump has repeatedly indicated that Europe is “worse” than China when it comes to trade with the United States, which suggests strong trade tensions between Brussels and Washington in the coming years. This is bad news for exporters on both sides of the Atlantic and the global economy.

The German stock market is also being penalized by the renewed uncertainty over German politics after the explosion of the ruling coalition. Candlestick Oalf Scholz said on Sunday he would be prepared to hold a vote of confidence in parliament before Christmas, earlier than the January date he proposed last week, following growing pressure from politicians and the public opinion for a faster vote.

DAX 40 daily price chart – key levels

The DAX 40 consolidates but the outlook remains constructive

Nevertheless, the technical analysis invites us to remain optimistic on the German stock market. The DAX 40 continues to stabilize on major support at 19,000 points. This support corresponded to the old resistance from spring and summer. The return/risk couple once again becomes in favor of purchases on this support, especially since the underlying upward trend is bullish.

In the event of a rebound, the first resistance to watch will be the symbolic threshold at 20,000 points. Conversely, a fall below the support would open the way to a retracement to the low of early September at 18,200 points.