The DAX traded 0.55% lower on Tuesday amidst fresh news on political turmoil in Italy and persisting US-China trade concerns. As the prospect of monetary policy support seems to be the only source of support for global equities recently amidst slowing global growth, today’s focus will be on the Fed’s meeting minutes as markets seek a dovish interpretation. There are no major economic releases out of the Eurozone today which will leave the influence on price action to geopolitical and trade headlines alongside the Fed’s meeting minutes.
The DAX traded higher early Tuesday as it reached the resistance at 11750 before geopolitical headlines dragged the index 64 points lower to end at 11651. Today look to the 11660 level near the 200-day MA to determine near-term direction on the DAX , as a sustained move above this level would indicate buying pressure and lead price to a re-test of the resistance at 11750. However, failure to trade above this level coupled with a decline below the 20-period MA would indicate selling pressure and drive the DAX towards the lower support at 11550. It is worth noting that until we see a break above the 11850 level near the 20-day MA, the bearish outlook holds.
Resistance: 11750 /11850