The DAX traded higher and found support from Wall Street as positive US corporate earnings report provided a boost during Tuesday’s session. While uncertainty on the US-China trade front persists, Brexit headlines on the other hand raised hopes that a deal would be reached by the end of the week. In terms of data, ZEW economic sentiment figures from Germany and the Eurozone declined and remained in contraction territory however came in above their respective estimates. Today, traders should look to Eurozone trade balance data and US retail sales figures to provide direction during the day alongside US earnings releases. Moreover sentiment influenced by any Brexit and the US-China trade headlines would impact the DAX today.
The DAX barely spent any time consolidating gains before surging to previous highs as it closed 143 points higher at 12629 on Tuesday. The price held above the 12450 level and surged to reach a high of 12685 while the 4H RSI reading remained in the overbought territory. Today, should the RSI reading exit the overbought territory and break the support trend line corresponding with that of price action, the DAX would turn lower and meet the lower levels of support at 12500, 12450 and 12380. We may see bullish momentum weaken in today’s session however a sustained move below 12590 would be required to indicate selling pressure and target the 12500 level. On the other hand, taking out the high at 12685 would enable advances towards 12740 and 12780.
Resistance: 12500 /12450