The DAX rose 2.9% on Friday at the back of cooling Sino-US trade tensions as China proposed to increase its US imports. Considering that the German economy is heavily reliant on trade relations, the news sparked a strong market reaction as the global trade outlook shifted to the positive side. Nonetheless, the index’s gains may be short-lived in the face of today’s weak GDP growth figure from China. Moreover on the economic front, Germany is set to release its PPI report for December and should add to the recently weak economic outlook on the Eurozone.
The DAX index successfully exited its ranging period as it broke out of the key resistance zone at 10950/11000 and climbed to a new high of 11260. Moreover the 20-period MA crossed over the 200-period EMA confirming bullish sentiment while a daily RSI reading of 60 leaves ample room for price action to rise with the upper Bollinger band. A break above 11260 could offer bulls a test of the next resistance level at 11400.
Support: 11000/ 11150
Resistance: 11260/ 11400