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European shares fall on Friday, DAX posts its worst weekly result since October

  • European stock indices recorded slight losses on Friday to close another week lower.
  • Davos ended with little guidance on rates from policymakers.
  • The rate tantrum is underway as investors shy away from hopes of an excessive rate cut.

European stock indices fell on Friday as investors left the World Economic Forum (WEF) in Davos, Switzerland with few upbeat headlines from the European Central Bank (ECB). This week, ECB policymakers have worked overtime to dispel market expectations of an imminent interest rate cut. With inflation remaining high for longer in the European economy, the ECB cannot lower rates for the time being.

ECB President Christine Lagarde went to great lengths to avoid talking about monetary policy during her scheduled appearances at the Davos economic summit, but noted in an interview with Bloomberg that excessive market expectations of a rate cut by the ECB may be hindering, rather than helping, progress in the fight against inflation.

In the absence of supportive statements at Davos, investors were forced to withdraw their bets on ECB rate cuts, and European stocks retreated on Friday. Most indices posted their worst declines in several months this week, and bullish momentum remains mired in misaligned market expectations.

The German DAX closed practically flat on Friday, with a slight drop of 0.07% and a decline of 12 points to close at 16,555.13 euros. The French CAC 40 fell almost 40 points and closed with a decrease of 0.4%, at 7,371.64 euros. The pan-European STOXX600 closed at 469.24 euros, with a decrease of 0.26% and a loss of 1.21 points.

The FTSE, London's main share index, made little progress on Friday and closed up 0.04% at £7,461.93, up 2.84 points but still at six-week lows near £7,400.00. .

DAX Technical Insights

The German DAX tested a seven-week low this week, capturing a late-week bid to end trading near €16,550.00, still lower on the week but keeping closing bids within reach of the lows. short term.

The DAX is down in 2024, but remains decidedly higher since the last major low in October, with bids close to €14,600.00.

The intraday bullish momentum was slowed by the 200 hourly simple moving average (SMA) near €16,600. Next week's bids will face significant technical resistance from short-term congestion between €16,700.00 and €16,750.00.

DAX hourly chart

DAX Daily Chart

DAX

Overview
Latest price today 16573.5
Daily change today 34.50
Today's daily variation 0.21
Today's daily opening 16539
Trends
daily SMA20 16631.52
daily SMA50 16340.21
SMA100 daily 15833.56
SMA200 daily 15879.47
Levels
Previous daily high 16567.51
Previous daily low 16410.88
Previous weekly high 16820.78
Previous weekly low 16501.46
Previous Monthly High 16984.44
Previous monthly low 16229.16
Daily Fibonacci 38.2 16507.68
Fibonacci 61.8% daily 16470.71
Daily Pivot Point S1 16444.08
Daily Pivot Point S2 16349.17
Daily Pivot Point S3 16287.45
Daily Pivot Point R1 16600.71
Daily Pivot Point R2 16662.43
Daily Pivot Point R3 16757.34

Source: Fx Street

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