The DAX Index built on Monday’s gains as it surged 0.62% on Tuesday. Improved prospects over the Chinese economy upon which German trade heavily relies on alongside trade inspired optimism helped buoy the Index despite slowing growth in the European economy. Today, Headlines reporting a deal close to settlement between the US and China should uplift sentiment and influence positive price action on the DAX. Moreover, On today’s data front Eurozone and Germany publish Services PMI reports.
The DAX ended at 11754 on Tuesday after breaking through the 200-day MA at 11720 following a short pause in momentum. While the RSI reading continues to hold above the support line, it has now entered the overbought territory. Bullish momentum may extend price towards higher levels at 11910 and 11940 should price trade above the resistance at 11860 and continue rising with the upper Bollinger band. Moreover, Look for a break of the RSI trend line to suggest a move lower towards initial support at 11720 and subsequent 11650 level.