Dax Closes at July Low After Erasing Weekly Gains
The German blue-chip index closed Friday at 25,304 points, marking its lowest level since late July. The index erased all gains made earlier in the week.
The Dax lost 1.6 percent on Friday to close at 25,304 points. This is the lowest closing price recorded since the end of July. The index erased all positive momentum accumulated during the preceding trading days.
Handelsblatt Finanzen reports that the market is now at a critical technical threshold. The 25,300-point level serves as a key support line for the German benchmark. A sustained break below this figure would likely trigger a deeper decline.
Producer prices drive selling pressure
Inflation data released on Friday morning accelerated selling activity. German producer prices rose more than market expectations. Analysts note that prolonged high energy costs are impacting corporate margins. This data confirmed that inflationary pressures remain embedded in the economy.
The timing of the data release coincided with a quarterly options expiration event. Known as Hexensabbat, this event increases trading volume and volatility. The combination of fundamental concerns and derivative unwinding amplified the downward move.
September tracks historical negative pattern
The index is down 3.6 percent since the start of the month. September is one of only three months with a historically negative average performance. The current trajectory aligns with this seasonal trend of weakness.
Technical levels define next move
Traders are watching the 25,300-point support level closely. A temporary dip followed by a rebound has occurred multiple times recently. However, a sustained close below this level signals a shift in the trend. If the index holds, the next resistance lies at 26,000 points. The Dax has failed to break this level twice in recent sessions.
