Positive close for the DAX at 12,176.4 as investors shrugged off China’s $60 billion tariff retaliation (on President Trump's escalation of $200 billion in tariffs) which is set to take effect on September 24th. China said that the United States had not been “sincere” and it had no choice but to retaliate, noting that China is now imposing tariffs on around 85% of what it imports from the U.S. The ongoing trade war has not yet triggered a risk-off mode as investors expect this tit-for-tat to continue and further develop well into the future. Investors await ECB President Draghi’s speech at 14:00 GMT and his remarks on the trade tensions and the QE program.
The daily MACD indicator turns from negative to positive on the DAX with the MACD line crossing the signal line from below, as the index broke above our resistance levels of 12,161.5 and retested it on the downside without closing below it; confirming it as a support. The bullish momentum is expected to continue if the market confirms (stays above) our second support level while trading above the 20,50, and 200-periods SMA.
Support: 12,106.7 12,161.5
Resistance: 12,250.1 12,407.4