The Dax made a slight decline of 0.29% on Tuesday after varied moves occurred in different sectors of the index and weak forecasts of German business activity facilitated the move lower. Fundamental weakness is further reflected in today’s German PPI's higher than expected forecast of 0.1% . Given the importance of oil as an input in domestic production, the commodity will be in focus as its direction may move the German index by an indirect implication on the Eurozone’s inflation.
The index is entering a ranging phase between the bounds of 10853 and 10694. A move above the 10853 zone could push the index to further resistance levels at 10920 as it remains in bearish territory, Whilst a move below the support of 10694 could signal the formation of lower lows. Moreover the RSI reading is mixed and sits slightly below the 50 reading indicating indecisive price action.
Support: 10685 / 10590
Resistance: 10853 / 10920