The German blue-chip index was catalyzed 1.64% higher on Tuesday fueled by trade optimism alongside better than expected earnings results out of Europe. News of the US and China meeting next week to resume talks helped uplift global sentiment while earnings results influenced price action in the absence of economic data. Meanwhile, The IMF downgraded its global growth forecasts citing global trade and Brexit uncertainty. Today, Manufacturing PMI figures out of Germany, the Eurozone and the US will hold strong influence on the day as they bring further insight into the global economic outlook and determine the likelihood of easier monetary policy from global central banks. Moreover, corporate earnings out of Europe should impact the DAX’s price action during the day.
The DAX rallied by over 200 points to reach a high of 12554 before ending at 12490 on Tuesday. The price charged through resistance at 12380 followed by last week’s high at 12468 to negate the DAX’s bearish bias. Moreover, the 20-period Ma is crossing over the 50-period Ma to reflect a shift in the short-term trend to the upside. Look for price to hold above 12468 to uphold bullish sentiment while a trade through resistance at 12550 is required to enable advances above 12600. On the other hand, look for a decline below 12468 to signal a shallow retreat towards the support at 12425.