The unfavorable inflation data from the United Kingdom adversely affected European indices, pushing Germany's DAX to close the trading session down 0.25 percent.
The UK CPI Pushed GER40 Lower
In April, the annual inflation rate in the United Kingdom decreased by 2.3%, from 3.2% in March, below the consensus estimate of 2.1%.
"The CPI reading for April will not narrow the gap in viewpoints among MPC members: some are concerned about the continuation of underlying price pressures." Consequently, it is now improbable that a rate cut will occur in June, leaving "live" meetings for August and September, according to some analysts.
What Could Affect The GER40 Price?
In other economic news, the European Automobile Manufacturers' Association reported a 13.7% increase in new car registrations in the EU for April, amounting to 913,995 units. For the month, there was a notable increase of 19.8% in new registrations in Germany.
Wednesday's closing price of $18,673.30 for the GER40 was 0.3% lower than the previous day, reflecting the cautious sentiment observed in other European stock markets as investors continued to evaluate the monetary and economic outlook.
Investors await today's PMIs, which could be a crucial price driver for GER 40. As of now, the German Flash Manufacturing PMI could be 43.40, while the Flash Services PMI is forecasted to be 53.60.
GER40 Market Movers
Amid rumors that China could levy up to 25% tariffs on the auto industry, potentially erecting barriers from the world's largest car market, heavyweight auto equities in Frankfurt led the declines.
Volkswagen, Porsche, Mercedes-Benz, and BMW experienced a decline of 0.6% to 3.6%.
In contrast, the technology sector produced a range of outcomes before the eagerly awaited Nvidia earnings report. With a 3% increase, Infineon maintained its robust momentum, whereas SAP and Zalando closed the day in the red.
Dax Index (GER40) Technical Analysis
In the daily chart of GER40, the broader market outlook is bullish, supported by the rising 20-day Exponential Moving Average. The ongoing buying pressure is potent as long as the current price holds the momentum above this crucial line.
In the broader context, the most active level since November 2023 is 16665.00, which is below the current price. Moreover, the 100-day EMA line showed a bullish crossover with the high-volume line, suggesting a confluence of buying pressure.
Based on the current market structure, GER40 has a higher possibility of extending higher, where the main aim is to test the 19281.30 Fibonacci Extension level. However, an extensive downside correction with a consolidation below the 20 EMA could lower the price towards the 100 day SMA line.
