The DAX index, sensitive to world trade developments, moved 0.3% higher as Sino-US trade progress uplifted investors’ sentiment with news of an extension to the March 1st deadline on Chinese tariffs. However Germany, with the auto industry as its backbone, faces another headwind with the potential risk of US auto tariffs on the EU. Moreover, German’s economic slowdown presents another curb to the DAX index’s bullish bias should domestic data continue to disappoint.
The DAX has managed to push past resistance at 11450 to close at 11457 on Friday. While bullish bias prevails, the RSI reading has reached overbought threshold and raises the chances for a pullback on the Index. Price should hold above the 11500 level to signal further upside move with the next target at 11570. Failure to sustain above that level should take the index to the 20-period MA at 11430 before deciding on further direction.
Support: 11420/ 11380
Resistance: 11570/ 11670