“The juncture is the convergence of 2 important trendlines (on a linear scale). The first is an Up trendline stemming from the 2011 lows in the DAX and connecting the 2012, October 2014 and August-October lows. The DAX broke below the trendline early in the year and, other than the temporary spike back above it in April, it has struggled to reclaim it since. From a technical perspective, this trendline is seemingly the barrier that has kept the German DAX in check. The index is once again bumping the underside of the trendline presently, in what looks to be a key test for the DAX,” according to See It Market.
Some investors may be deterred by the ongoing flood of Syrian refugees entering Germany. While observers previously argued that the influx of refugees may help reverse Germany’s aging demographics, augment the country’s dwindling labor pool and stimulate infrastructure spending, Centre for European Economic Research President Clemens Fuest argues that Germany will have to pay a high cost and see little return on investment.
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“Making the test even more significant is the proximity of the post-2015 Down trendline connecting the April and November-December highs in the DAX. This trendline is nearly converging with the post-2011 Up trendline at the moment in what could be the most significant charting juncture for the German DAX index since the post-February rally began,” adds See It Market.
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