Major European Indices ended higher on Monday with the DAX Index outperforming its peers as it surged 1.35%. China’s expansionary manufacturing data improved prospects of the nation’s economy thereby easing global growth concerns and offsetting downbeat manufacturing data from Germany and the Eurozone. With no major economic releases out of the Eurozone, the test of investors’ confidence stems from further Brexit developments which calls for cautious sentiment.
The DAX index ended at 11681 on Monday before price rose with the upper Bollinger band to test the resistance at 11720. The hourly chart shows Bollinger bands narrowing, indicating range-bound price action within 11720-11640 in the near-term before the index can take further direction. Moreover, the RSI reading continues to hold above the support line and leaves room for price to extend upward progress. Breaking through the 200-day MA at 11720 will bring into play resistance at 11780 and ultimately determine the outlook on the DAX. On the other hand, a decline below 11640 will lead the index lower with the 20-period MA acting as dynamic support.