Dax bounced off the 50 SMA last week

The 50 SMA Turns Into Support for DAX30 Despite the Escalating US-China Trade Conflict

Posted Monday, May 20, 2019 by
Skerdian Meta • 1 min read

Stock markets have been pretty bullish this year after having a pretty bad year in 2018 as the US opened a trade war with China. But the two countries started trade negotiations at the end of last year which improved the sentiment in financial markets, and stock markets have been bullish since that time.

But the trade tensions escalated once again in the last few weeks as China broke the promises it made to Trump on IP theft and technology transfer, and the sentiment turned negative again. As a result, we saw stock markets turn bearish over the last two weeks and DAX lost more than 600 pips.

But, there seems to be a retrace now after Dax bounced off the 50 SMA last week. So the 50 SMA has turned into support now on the weekly chart. If you switch to the daily chart, you will see that the same moving average provided support last week on that time-frame.

Although, this is not over because China and the US are standing firm on their positions which will likely escalate the conflict further and that would hurt the sentiment in financial markets. But, this jump is a good sign for buyers. Although, the uptrend will not have resumed until the buyers push above the previous highs for this year.

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