The DAX of Germany dropped 0.12% yesterday ending with modest losses as persistent trade war concerns continue to weigh on investor sentiment. China has retaliated with a 25% tariff on $16 billion of US goods after the US Trade Representative's office revealed a list of Chinese goods that will be subject to tariffs. Mixed reports on the earnings calendar this morning with Adidas reporting an increase of second-quarter net income by 20% to €418 million but Deutsche Telekom reported a second-quarter net profit decline of 43% giving a confusing and mixed signal to the German index.
Technically, the DAX is still trading below the trendline and most importantly below the 200-period MA. Therefore weakness is expected to continue for the next few days unless some major fundamental data reverses the current direction of the trend. Watch out for an important support level at €12,410. The RSI looks mixed to bearish suggesting downwards pressure.
Support: 12410 12160
Resistance: 12640 12765