The DAX traded 0.71% higher on Wednesday supported by positive economic data and prospect of looser monetary policy from global central banks. Germany and Eurozone’s services PMI showed a slight expansion in contrast to the region’s weaker manufacturing activity. Separately on central bank news, EU leaders nominate Chrisitine Lagarde for the ECB’s presidency whom market consider to be dovish thereby supporting European equities. Today the Eurozone publishes retail sales data which will be in focus while price action will rely on news-driven sentiment as markets monitor Middle East tensions as well as US-China trade developments.
The DAX extended gains on Wednesday to record its 6th day of consecutive gains. Bullish momentum enabled the index to climb higher and overcome the resistance at 12600 to end at 12616. Should bullish momentum stall, we may see price consolidate above 12600 with a decline below the 12580 level coinciding with the 20-period MA to indicate short-term weakness and a shallow pullback towards the support at 12500. Alternately a break above the resistance at 12670 would be required to drive the DAX towards the higher resistance at 12730.