The German blue-chip index ended last week on a down note due to the inevitable exchange of retaliatory moves from the US and China. China reportedly would put trade negotiations with the US on hold in so far as the US continues to provoke the two nation’s trade relations with the likes of the recent US ban against Chinese telecom Huawei. On economic data, Eurozone CPI reports showed inflation picked up in April yet remain below the ECB target of 2%. Today, Germany published PPI report for April which showed a 0.5% growth however leaves little impact on the DAX as markets await further trade developments. Traders should continue to monitor US-China trade headlines to drive price action and impact sentiment during the day.
The DAX ended 0.58% lower and closed at 12238 on Friday as price failed to overcome resistance at 12330. However, the price has managed to hold above the 20-period MA currently at 12150 as it forms a sequence of higher highs and higher lows to form a new uptrend. Should price decline below 12150, the DAX could find support at 12080 coinciding with the 50-period MA to maintain the uptrend. Should price hold above 12150, look for a sustained move above 12250 to indicate buying pressure and a break through 12330 to restore the bullish view on the DAX and target higher resistance levels at 12400 and 12450.
Resistance: 12330 /12400