Daily Analysis DAX40 - 28 July 2023

European shares declined on Friday, retreating from their multi-month highs achieved in the previous session. The pullback was influenced by a combination of factors, including a mixed batch of earnings reports and an increase in bond yields following the Bank of Japan's adjustments to its monetary policy.

The Bank of Japan (BoJ) decided to make its yield curve control policy more flexible by loosening its defense of a long-term interest rate cap. Consequently, Japanese government bond yields rose, and this move had a ripple effect on European government bond yields, leading to similar increases.

Capgemini, a French IT consulting group, experienced a notable decline of 7.5% in its share price in the context of corporate earnings. This decline came after the company announced its plan to invest a substantial amount of 2 billion euros ($2.19 billion) in artificial intelligence (AI) over the next three years.

On the other hand, French drugmaker Sanofi experienced a more modest decline of 2.5% despite raising its earnings forecast, indicating that the positive news was not enough to outweigh other market influences.

Meanwhile, luxury goods manufacturer Hermes witnessed a 3.8% increase in its share price, driven by accelerated sales in the second quarter, particularly for their iconic Birkin bags.

Additionally, the Pan-European stock and derivatives exchange, Euronext, experienced a notable gain of 5.2% after announcing the launch of a 200-million-euro ($219.88 million) share buyback program.

DAX touched the last resistance level of 16,400 for the third time. There is a possible price consolidation around the current resistance area of 16,200-16,400, which could indicate the formation of a reversal. Additionally, the RSI confirms a divergence on the weekly chart. Until we break the 16,400 level, this reading will continue to be the actual narrative possibility

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200