DAX recovers ground but remains vulnerable

European equities pared losses this Wednesday, recovering a modest portion of the ground lost earlier this week. The German DAX added 61 points to close at 9,624.51, getting little support from local data, as German industrial production declined by 0.5% in February monthly basis, less than market's expectations of a 1.8% fall, but in line with the poor factory orders released on Tuesday. Auto-makers were the worst performers, with BMW losing 0.5%, and Daimler lower by more than 1%, while banks led the recovery, as Commerzbank and Deutsche Bank added over 2% each.

DAX technical perspective

“The daily gain was not even enough to erase Tuesday's losses, and the daily chart shows that the benchmark keeps developing well below its moving averages, while the technical indicators have lost their bearish strength, but remain within bearish territory and with no signs of changing route,” said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the 20 SMA has crossed below the 100 SMA, with the shortest now offering a dynamic resistance around 9,742. In this last time frame, the technical indicators have recovered from oversold readings, but remain below their mid-lines, not enough to confirm further gains at the time being.”

Support levels: 9,652 9,591 9,507. Resistance levels: 9,693 9,765 9,810.