German investors regain confidence in the markets

February 16, 2021 15:00

Among the macroeconomic data published today is the recent performance of the German ZEW index. This data is published by the Center for European Economic Research, in which the sentiment of German institutional investors is determined through a survey carried out among 350 financial institutions and analysts, regarding their expectations for the next 6 months and current perception of the situation.

The interpretation of this important indicator is simple; if the value is set above 0 it is interpreted as optimism, while below 0 is pessimism.

After the publication of this data, we can observe a disparity between the current situation and future expectations, since we can observe that the ZEW index of investor confidence in relation to the current situation is slightly worse than expected (-67.2 vs. -67.0 expected), while confidence in the future not only grows in relation to the previous month, but also far exceeds market expectations when a contraction was expected compared to the previous month (71.2 vs 59.6).

On the other hand, we also have the annual GDP data for the eurozone, which came in at a decrease of -5% compared to the -5.1% expected, slightly better than expected.

For the moment, this data has been calmly received by the German DAX30, since at the moment it is trading practically flat, with a slight decrease of 0.09%. Although, throughout the month, it has accumulated an increase of more than 5%, which has taken it to its current resistance level and its previous all-time highs, after successively resting on its 18-session black moving average.

The uptrend seems clear, but we must overcome this important resistance in order to look for higher levels. If we look at its stochastic indicator, we can see a slight overbought, so if it finally fails to overcome its current resistance level, we can find a price retracement to its first support level in the 18-session average where it could find again a boost to attack the current highs.

Source: DAX30 daily chart of Admiral Markets MetaTrader 5 (from October 22, 2019 to February 16, 2021). Held: February 16 at 1:50 p.m. EET. Note: Past performance is not a reliable indicator of future results, or future performance.

Price evolution of the last 5 years:

  • 2020: 3.6%
  • 2019: 25.48%
  • 2018: -18.26%
  • 2017: 12.51%
  • 2016: 6.87%

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