European Indices traded higher on Friday amid trade optimism that was later reinforced as the US and China reached a partial trade deal that promised the delay of scheduled tariffs against China in exchange for additional agricultural purchases. Moreover, China’s economy, upon which Germany heavily relies on for trade purposes, revealed a decline in exports and imports. The data may subdue risk appetite that was bolstered by progress in US-China trade talks. Today, the Eurozone publishes industrial production data which is expected to tick higher following a decline from the previous month. Apart from the data, market participants should monitor geopolitical headlines to influence the DAX as it is amongst the indices most sensitive to the global economic outlook.
The DAX scored a heft gain of 347 points to end at 12511 on Friday. The price rallied against the upper Bollinger band exhibiting strong bullish momentum and recorded a high of 12561. The 4H RSI reading currently resides in the overbought territory and has yet to exit it in order to confirm a bearish candlestick formation that followed the advance in price. A sustained move below 12450 would indicate selling pressure and lead the DAX to the lower support levels at 12350 and 12250 near the 20-day MA.
Resistance: 12560 /12600