European Indices had a mixed trading session on Wednesday however the German blue-chip index managed to modestly extend its rally by a rise of 0.32%. Economic data wasn’t in favor of the higher moves as the Eurozone’s trade surplus narrowed to 14.7 billion in August while US retail sales declined in September. The only source of support stemmed from heightened hopes over a Brexit deal as negotiations between the EU and UK seem to progress. However, today news report that the UK government isn’t pleased with PM Johnson’s proposed deal which would further delay any potential progress at the EU summit. There are no major economic releases out of the Eurozone to impact price action, therefore influence will be left to Brexit headlines.
The DAX gained 40 points to close at 12670 on Wednesday. The price initially traded lower on however managed to hold above the support at 12590 before briefly edging above the high at 12684 to reach 12703. The 4H RSI reading remains in the overbought territory and has yet to exit it and break its support trend line. This alongside a break below 12590 would signal bearish pressure and lead the DAX towards the lower levels of support at 12500 and 12450. A sustained move above 12650 would make it more likely that the DAX break above 12684 to reach the higher resistance levels at 12740 and 12780. However failure to hold above 12650 would indicate bullish momentum has weakened.
Resistance: 12684 /12740