The DAX Index reversed direction on Monday and saw last week’s gains partially erased as it dropped 1.61% . Market sentiment turned negative over the economic implications of the escalating US-China trade dispute that saw President Trump’s ban on Huawei materialize as US companies act in accordance by cutting business ties. The move undermines potential progress on trade negotiations and weighed on the German blue-chip index sensitive to world trade developments. Today the Eurozone publishes consumer confidence report. While the figure will reflect the state of consumption in the region amidst the global trade war, US-China trade developments will remain a key driver of price action.
The DAX declined by 1.61% to end at 12041 on Monday. The price found support at the psychological level around 12,000 which separates the index from a bearish view. The DAX would have to move above the 20-period MA around 12150 to restore buying pressure and target 12250 which would make way for a re-test of the resistance at 12330. Failure to hold above 12,000 level would negate the short-term uptrend and lead to lower support levels at 11950 and 11900.
Resistance: 12150 /12250