The DAX traded 0.06% lower on Tuesday as market participants await the FOMC meeting today in order to determine direction. In terms of data, ZEW economic sentiment figures out of Germany and the Eurozone improved whilst remaining in negative territory. The risk-off mood should hold as markets’ are cautiously optimistic about deputy level talks between the US and China this week while Saudi is reported to restore its oil supply by the end of the month. Today, the Eurozone publishes CPI data which is likely to have a muted impact as geopolitical and trade headlines dominate market sentiment while the FOMC meeting today will be the main driver of price action as markets are not only expecting a rate cut, but a monetary policy easing bias.
The DAX lost 7 points to end at 12372 on Tuesday. The price traded lower and found support at the 12300 level whilst maintaining range-bound price action below the 20-period MA. Today, look for a sustained move above the 12400 level near the 20-period MA to indicate buying pressure and lead to a test of the resistance zone at 12500/12520. Failure to trade above the 20-period MA would leave the DAX ranging while a trade below the support at 12300 would target lower support levels at 12250 and 12200.
Resistance: 12400 /12500