Negative cues from Wall street and Asian markets on Trump's warning that he could pull the US out of the World Trade Organization is expected to cap upside move of the German DAX and influence bearish investor sentiment today. The German index tumbled 1.1% on Friday and the market is expected to continue on the bearish term today in light trading ahead of U.S. holiday.
From a technical perspective, the German gauge dropped yesterday back to our short-term target and support level at €12,425. We are now waiting to see whether the price will remain above the 200-period moving average. The consolidation cycle has not ended however, due to lack of any major fundamental news. We don't expect the index to break from the €12,425 to €12,570 range anytime soon.
Support: 12250 12125
Resistance: 12415 12570