European markets were given a boost credited to progressing engagement between US and China following a call that promised to cut tariffs on US auto. German stocks rebounded to the optimistic news ,nevertheless, it should be taken as a fleeting sign of easing tension as the trade dispute is far from over. On a domestic level economic sentiment, gauged by the ZEW index, rose and exceeded the forecast yet remains negative. Sino-Us optimism alongside upbeat data helped raise the DAX 1.49% to close in positive territory. In addition, Industrial production for the Eurozone is on the economic calendar and any further lift in sentiment across European sessions is subject to the progression of global trade and the uncertainty of Brexit.
The DAX ,as it is most sensitive to Chinese related news due to its strong relations, treads above the 20 moving average as it aims to wipe out its losses. Should it break above 10,898 at the 100 moving average , The index will continue to ride with the Bollinger bands to the upside as it pursues further resistance levels . Failing to break above that level, will have the index bounce to lower band at 10,761. A breakout below could signal a downside move to support at 10,630, with a further key support from December 2016’s low of 10,404.
Support: 10630 / 10520
Resistance: 10960 / 11022