The DAX extended gains on Wednesday to trade 0..26% higher ahead of today’s ECB monetary policy meeting. Manufacturing PMI reports out of Germany and Eurozone continue to trend lower as both figures fell deeper into contraction territory. The data highlights the region’s economic slowdown and boosts expectations of easier monetary policy which has helped underpin European equities. Today Germany publishes Business sentiment figures which are estimated to decline and add to yesterday’s negative economic data. Traders should look to today’s ECB monetary policy statement and interest rate decision to dominate sentiment and influence the DAX’s price action.
The DAX managed to hold above the support at 12468 and gained 32 points to end at 12522. The RSI reading indicates overbought conditions however sustained bullish momentum may enable the DAX to trade through resistance at 12600 to meet higher levels at 12625 followed by 12660. Failure to trade above 12600 may suggest bullish momentum has come to a halt and should lead the DAX lower with support found at the 20-period MA around 12470. A decline below 12470 would be required to drive the DAX towards the lower level of support at 12425.