European equities are losing ground on the back of fears around global slowdown further validated by the IMF’s downgraded forecast for global growth. On the economic front, business sentiment in the Eurozone declined and remains weak in Germany despite beating the estimate. Trade-related headlines continue to be a driving force in the market as China warns against the effects of its economic slowdown and remains a negative influence on the global outlook.
The German Index declined by 0.44% yesterday led by weakness in the Asian market. The RSI reading hovers around 50, however a move well below the midline alongside a breach of the support level at 11,000 should revive bearish sentiment on the DAX. Meanwhile on the hourly chart, Bollinger bands are constricting suggesting a ranging period before an imminent breakout in price action.
Support: 11000/ 10890
Resistance: 11150/ 11260