The German Index edged lower yesterday following the release of downbeat Chinese trade data on the backdrop of a slowing Eurozone economy. Weak economic activity in Germany and China amplified gloomy sentiment stemming from the uncertainties related to the global trade war and consequences of today’s Brexit vote that remain far from clear. Moreover, traders should draw their attention to today’s ECB’s annual report and even more on remarks by President Draghi related to the grim performance of the Eurozone economy.
The DAX reached the strong support zone of 10780/10800 before moving back up to test a trade through the 200-period MA. A sustained move above the 20-period MA would signal buying pressure and allow prices to retest the resistance zone of 10970/11000. However if the price fails to move above 10940, a break below support of 10790 remains likely.
Support: 10850/ 10790
Resistance: 10970/ 11054