The German blue-chip index rose by 0.37% on Monday as hopes of progress in US-China trade relations provided support. Moreover, the EU decisions to grant the UK a 3-month Brexit extension provided relief as it makes a no-deal departure less likely. However, it remains uncertain whether the general election PM Johnson strives for would materialize in the face of opposing UK lawmakers. Today there are no major economic releases from the Eurozone which will leave influence to geopolitical updates on the US-China trade situation and Brexit. It is worth considering that Wall Street may provide directional cues during the day as the US publishes consumer confidence data ahead of the Fed’s monetary policy meeting tomorrow.
The DAX extended last week’s streak of gains into Monday as it closed 47 points higher at 12941. The price recorded a high of 12988 near the 13000 resistance level while the RSI reading drifted higher and resides at the overbought territory. Should the RSI reading exit the overbought territory and price trade below the dynamic support of the 20-period MA near the 12890 level then we might see a short-term pullback. A move below the support at 12650 would be required to impair the bullish view. However should price hold above the 20-period MA, the DAX would consolidate gains until a break above 13000 signals an advancement towards the higher levels at 13080, 13130 and 13200.
Resistance: 13000 /13130