The DAX gained 75.5 points yesterday (up by 0.63%) to close at 12,090.2 as ECB left rates unchanged coupled with Mario Draghi's positive remarks on an "underlying strength in the economy and the rising wages". Italy concerns were appeased as Mr. Draghi addressed the issue by stating that "what we are now waiting for is facts" from the Italian government. Positive market sentiment spread as China welcomed the US trade talks offer. In economic news, we have the Wages in Euro Zone (YOY) (Q2) and the Trade Balance (Jul) both at 09:00 GMT.
The DAX confirmed our Head and Shoulders pattern with the index breaking out of the consolidation area and retesting our resistance level at 12,035.2 and using it as support. Consolidation area target (rectangle formation) is at 12,175 with Head and Shoulders target at 12,216. Further confirmation on the hourly chart upon close above our resistance level of 12,106.7, in addition to the market respecting our short term uptrend.
Support: 11,934.8 11, 895.6
Resistance: 12,106.7 12,161.5