Daily Analysis DAX40 - 31 July 2023

European shares slightly declined on Monday as investors awaited data on Eurozone inflation for July, which is expected to show a decrease. This could potentially lead to the European Central Bank keeping interest rates steady in September. Heineken faced a 4.8% slide after lowering its 2023 profit growth forecast due to a slowdown in Vietnam impacting first-half earnings more than anticipated. Diageo and Anheuser-Busch InBev also fell over 1%. The flash reading of euro area inflation, scheduled for 0900 GMT, is anticipated to reveal a decline to 5.3% in July from 5.5% compared to the previous year. Despite raising rates for the ninth consecutive time, the ECB may still consider a pause in September as core inflation remains persistent. Meanwhile, an index of Eurozone banks showed a slight uptick of 0.2% after the European Banking Authority's annual stress test results revealed that three out of 70 banks in the European Union failed to meet binding capital requirements.

DAX surprisingly broke the 16,400-resistance level, fueled by hopes that the ECB may hold interest rates at their current levels. This is particularly relevant given the actual economic data, which suggests a possible recession if the tightening cycle continues to rise.

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