Mixed data for the German ZEW

July 06, 2021 16:00

If in June we commented on the positive data for the German IFO, during today's session, we have known the important data corresponding to the German ZEW, with regards to investor confidence and in relation to the current situation.

This data is published by the European Economic Research Center in which the sentiment of German institutional investors is determined through a survey of around 350 financial institutions and analysts in relation to their expectations of the next 6 months and the current perception of the situation.

The interpretation of this important indicator is very simple, since if the value is set above zero it is interpreted as optimism and below zero as pessimism.

After the publication of this data we can see a clear disparity between the current situation and investor confidence, since we can observe that the ZEW index of investor confidence in relation to the current situation has not only managed to move into positive territory after two years, but has also been much higher than expected by the market consensus to settle at 21.9 points compared to the expected 5 points.

On the other hand, investor confidence has fallen more than expected after reaching 63.3 points, compared to the 75.2 points expected after reaching 79.8 points the previous month.

The above data, together with the positive data from the IFO in relation to business expectations and business confidence that we discussed in the aforementioned analysis, show that investors are confident of a sustained recovery of the German economy and that therefore the European locomotive will continue to develop a positive evolution during the coming months.

Despite such positive macro data, if we look at the H4 chart, we can see how during the last few sessions, the DAX30 is trading practically flat with a slight rise of 0.10% so far this month.

Technically speaking, we can see how the DAX30, after marking historical highs on June 14, is performing a consolidation in the last few sessions. This has led it to make a bearish average crossing in H4 and temporarily lose its average of 200 in the red, although it finally managed to bounce higher.

Currently, the DAX30 has two important resistance levels, represented by the short-term downtrend line in the red and the resistance level around 15,700 points. The break of these levels could open the door to a new upward momentum in search of its all-time highs. Conversely, if the price loses its average of 200, we could find a further correction up to its next support level in the lower red band.

Source: Admiral Markets MetaTrader 5. H4 chart of the DAX30 Data range: May 14, 2021 to July 6, 2021. Prepared on July 6, 2021 at 13:05 hours CEST. Please note that past returns do not guarantee future returns.

 

Evolution in the last 5 years:

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

 

With the Admirals Trade.MT5 account, you can trade Contracts for Differences (CFDs) on DAX30, IBEX35, SP500 and more than 3000 stocks! CFDs allow traders to try to profit from the bull and bear markets, as well as the use of leverage. Click on the following banner to open an account today:

Trade With MetaTrader 5

INFORMATION ABOUT ANALYTICAL MATERIALS: 

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark (hereinafter “Admiral Markets”) Before making any investment decisions please pay close attention to the following: 

  1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
  3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  4. The Analysis is prepared by an independent analyst, Roberto Rojas (analyst), (hereinafter “Author”) based on their personal estimations.
  5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.
  6. Any kind of past or modeled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  7. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.
Avatar-Admirals
Admirals
An all-in-one solution for spending, investing, and managing your money

More than a broker, Admirals is a financial hub, offering a wide range of financial products and services. We make it possible to approach personal finance through an all-in-one solution for investing, spending, and managing money.