European markets traded lower across the board on Tuesday as weak economic data raised concerns over a global economic slowdown. Manufacturing PMI figures out the Eurozone and Germany ticked slightly higher above the expected readings however remained below their previous readings and in negative territory. Moreover, a dire ISM manufacturing PMI print out of the US added to the bearish pressure. Today there are no major economic releases out of the Eurozone which will leave attention and influence to the US ADP non-farm employment change. Apart from the data, trade and geopolitical developments will remain key drivers of price action while market participants should remain in risk-off mode following yesterday’s weak economic data.
The DAX declined by 1.32% and lost 164 points to end at 12263 on Tuesday. The price tagged the resistance at 12500 before trading lower and falling to the support at 12230. The daily RSI reading currently resides around the 50 mid-line and a trade below 12220 would be required to lead the RSI into negative territory and signal further weakness for the DAX. Below 12220, the price would target the lower support at 12140 near the 100-day MA. The price would have to hold above the support at 12220 and trade above the resistance at 12300 in order to indicate buying pressure and lead the DAX towards the 20-period MA at 12350.
Resistance: 12300 /12350