German DAX30 slid again on Wednesday and was trading 0.65% weaker during the London session, hovering around 12,150 EUR.
It was another negative day in the emerging markets and most of the emerging currencies crashed, which resulted into a risk-off trading sentiment. Therefore, stocks were sold-off and investors piled into gold and US dollar.
From the macrodata perspective, the German services PMI for August was revised lower and printed 55.0, down from 55.2 previously. In addition, the euro zone’s retail sales slowed on the yearly basis to 1.1% from 1.5%, while analysts had expected a slowdown to 1.3% only. Weaker numbers also helped the bearish mood on the DAX.
The index dropped to the key support of 12,100 EUR, where previous lows are located. If bulls wont defend this level, the bearish trend is confirmed and the next target for bears would be at 11,900 EUR. Moreover, the index has broken below the long-term bullish trend line, which also suggests a larger correction could occur in the near future.
On the upside, the first resistance for today is around 12,170 EUR and if broken, further upside potential toward 12,240 EUR seems likely.