German DAX gets support at 14,000

THE German DAX has been on a strong bull run since a sell-off in February last year when the index saw extended selling beyond its previous support in the 9,522.88 region based on the previous chartpoint dated March 9, 2020. However, it took just 2 weeks for it to rebound from the 8,726 region, which forms wave C on the upper figure.

From the macro point of view, the index performed relatively well in the first half of 2021 as the Covid-19 case numbers were falling - which provided hope to the German economy. However, the rise in the infection rate shook the market in September. Additionally, there was unexpected poorer gross domestic product (GDP) growth. To add fuel to the fire, inflationary pressure pushed Germany's GFK consumer sentiment to -1.6 points.

Another pressing issue is the negative interest rate in the eurozone. Also, Brexit has tied the hands of the Germans.