Current trend

Frankfurt Stock Exchange's leading index DAX 40 is correcting at 19070.0 amid continuing instability in the domestic bond market.

Monetary policy remains one of the key factors in the market dynamics. Thus, the recent decision of the European Central Bank (ECB) to reduce the main refinancing operations rate to 3.65%, the marginal lending facility rate to 3.90%, and the deposit facility rate to 3.50% is intended to ensure stable economic growth, since lending for companies and private clients will become more profitable, but the situation in Germany has not yet stabilized. This was confirmed by yesterday's data from the Institute for Economic Research (IFO), which recorded a decrease in the Business Climate index in September to 85.4 points from 86.6 points, the Economic Expectations indicator to 86.3 points from 86.8 points, and the Current Assessment — to 84.4 points from 86.4 points.

Yields on leading bonds are also falling, with the 10-year German bond rate falling to 2.189% from 2.330% today, and the 30-year rate to 2.507% from a peak of 2.579% on September 2.

The growth leaders in the index are Siemens Healthineers AG ( 4,37%), Symrise AG ( 2,15%), Siemens Energy AG ( 1,78%), Biersdorf AG ( 1,62%).

Among the leaders of the decline are BMW AG (–3,15%), SAP SE (–2,44%), Mercedes Benz Group AG (–1,67%).

Support and resistance

On the daily chart, the price is trading in a corrective trend, having updated the annual high of 19050.0 the day before.

Technical indicators have not changed the signal and are ready to hold a buy position: fast EMAs on the Alligator indicator are still moving away from the signal line, and the AO histogram, being in the buy zone, is forming correction bars.

Support levels: 18910.0, 18200.0.

Resistance levels: 19160.0, 19780.0.

Trading tips

In case of continuation of local growth, as well as consolidation of the price above the resistance level of 19160.0, buy positions with the target of 19780.0 will be relevant. Stop-loss — 19000.0. Implementation period: 7 days or more.

If the asset continues to decline and the price consolidates below the support level of 18910.0, sell positions with a target of 18200.0 will be relevant. Stop-loss — 19100.0.