The German blue-chip Index posted a decline of 0.37% on Tuesday. Sentiment towards the US-China trade dispute grew negative as President Trump states that he was not ready to make a deal while China is reportedly considering retaliating against the US by restricting earth exports. Adding to the downside pressure was economic data as German consumer climate index alongside Eurozone’s Business index posted weaker than expected figures, highlighting the region’s gloomy economic outlook. The prevailing pessimism over global growth saw German bond yields turn lower as demand for safer assets ramp up. Today, Germany publishes May’s unemployment figures which are expected to impact price action during the day while US-China trade headlines continue to dominate market sentiment.
The DAX turned lower on Tuesday however held above the 12,000 level separating the index from negative territory as it ended at 12027. The Dax has so far respected the trend line resistance from the May 16 high which alludes to downside price action. The price is currently turning lower to point to a break below the 11930 level which would signal the formation of a new low on the downtrend and suggest a decline towards the crucial support level at 11850. A lower high at 12120 is now in place and a push above that level would be needed to reverse the bearish short-term view
Resistance: 12080 /12120