Daily Analysis DAX40 - 18 May 2023

European stocks started the day on a positive note, mirroring the optimistic sentiment seen on Wall Street. This was fueled by signs that Washington was making progress towards reaching a deal to raise the U.S. debt ceiling and avoid a potential default.

Volkswagen saw a 2.6% increase in its stock value after announcing plans to revamp its core brand to enhance efficiency and returns. This propelled the carmaker to become the top gainer in Germany's blue-chip DAX index, which rose 0.9% and reached a new one-and-a-half-year high.

On the other hand, Deutsche Bank AG experienced a 1.3% decline as it agreed to pay $75 million to settle a lawsuit filed by women who alleged abuse by the late financier Jeffrey Epstein. The bank was also accused of facilitating Epstein's sex trafficking activities.

Despite reporting stronger-than-expected fourth-quarter sales, British luxury fashion brand Burberry faced a 4.9% drop in its stock price.

The DAX index opened with a strong gap, suggesting that the long-awaited clarity in market direction has finally emerged, with indications of increased buying activity driven by strong corporate earnings. The next significant test for the index lies at the 16,270-resistance level, which represents a solid historical level dating back to November and January. A breakout above this level would potentially pave the way for new all-time highs for the index.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16800	16400	16270	16000	15800	15600