Unlike the rest of European Indices, the DAX index posted gains on Wednesday despite lower than expected readings on the German IFO Business Climate Index. Positive corporate updates from the Index’s components aided led the gains while a weakening EUR should sustain the rally as it benefits the internationally exposed index. Today’s Earnings reports out of Europe and the US should hold influence on price action on the DAX .
The DAX Index rose 0.63% to end at 12313 on Wednesday as the price managed to break out of the resistance at 12260 now turned to near-term support. The price is currently sitting above the trend line resistance from Jan 2018, and a sustained move above 12330 would be required to target the 12400 level. Moreover, The RSI reading on the daily and 4h chart has entered the overbought region which suggests the Index will exhibit an eventual pullback. Look for a move below 12260 around the 20-period MA which has provided dynamic support on the rally to suggest a lower move towards 12200.