The DAX 40 declines as energy prices rise. Continue to soar, as exporters’ attitudes deteriorate.

Early in European trading, the Dax rose before falling as the day went on. Thanks to a surge in the US session, the index posted its second straight day of gains yesterday. The index has showed some resilience after its early-week losses as the highly anticipated Jackson Hole symposium, which began yesterday night, approaches.

The Gfk German Consumer Climate Index from earlier in the session offered a gloomy image. The forward-looking Gfk index decreased to -36.5 in September, a significant decline from the previously reported -30.9 in the prior month and far below the forecasted -31.8. The announcement follows yesterday’s decline in the German Ifo business climate index to its lowest level in more than two years.

As gas prices rise and there is concern about corporate profits in the industry, German Economy Minister Robert Habeck has announced that he would review the nation’s tax on consumers to help pay for assistance to suppliers.

As the Jackson Hole symposium approaches, attention will turn on Jerome Powell, the chairman of the US Federal Reserve, and his address on the future of US monetary policy, which is predicted to be both volatile and directive. At 14:00 GMT, Fed Chair Powell is scheduled to speak.

AUGUST 26, 2022: DAX 40 DAILY CHART

As we trade between the 20 and 50-SMA, yesterday’s bullish candle close saw us break back above the 50-SMA. The most recent daily swing low is located at the 13100 level (the blue line on the chart). We might revisit the YTD lows and push back below the crucial 13000 mark if the daily candle closes below this level. The Jackson Hole symposium later in the week and the changing emotion, on the other hand, might cause us to stay rangebound between the critical level and 13500, which also coincide with the 20 and 100-SMA.

Crucial intraday levels to keep an eye on:

Support Areas

• 13100

• 13000

• 12805

Resistant Areas

• 13370

• 13500

• 13762

FTSE 100: LOWER AS THE COMMODITY AND BANKING SECTORS LIMIT LOSSES

The blue-chip index traded in line with the Dax in the early going, posting slight gains before being corrected back to trade in the red as the day went on. The banking and commodities sectors were responsible for the early session gains, which enabled the index to maintain its tough character. Despite the index’s resiliency, it is still expected to suffer a weekly loss, but one that is less severe than that of many of its competitors. Data kept highlighting how rising prices were affecting corporate activity, and despite indications of an economic downturn, central bank authorities continued to raise interest rates aggressively.

Energy regulator Ofgem said that British energy prices would increase 80% to an average of GBP3,549 (USD4,188) a year starting in October, dealing a severe blow to the UK economy. Ofgem described it as a calamity, and more and more people are calling on the government to act quickly and decisively. The regulator also said that “prices might grow much worse until 2023” due to the winter gas market.

In business news, the riser’s board included GSK and the erstwhile Haleon subsidiary that provided healthcare to consumers (HLN). London Stock Exchange (LSE), which fell 98p to 8312p, was among the decliners. Following the board’s recommendation to accept an offer from US-based information management company OpenText, shares of former blue-chip stock Micro Focus International (MCRO) increased by 92%.

August 26, 2022, on the FTSE 100 Daily Chart

The FTSE is still showing strength as yesterday’s continuation of Wednesday’s recovery off support. Because losses have been restrained in compared to global indexes, the index continues to defy the trend. There are still considerable technical obstacles that must be overcome for a further move higher, even with the bullish trend continuing in effect. We would need a trigger, which may be presented by the Fed at the Jackson Hole conference with more subtle message.

Crucial intraday levels to keep an eye on:

Support Areas

• 7400

• 7310

• 7224

Resistant Areas

• 7500

• 7600

• 7790