The German blue-chip index traded 0.12% lower on Thursday after having surged earlier in the day at the back of a settled Brexit draft between EU officials and PM Johnson. However, the Uk parliament has yet to approve of the deal proposed by PM Johnson which would ultimately decide whether the uncertainty of Brexit has come to an end. Meanwhile on the US-China trade front, the two nations have yet to agree on the supposed progress made in their most recent negotiations. Traders should continue to monitor trade headlines as the US-China trade war is considered a major headwind on the global economy. Today, there are no major economic releases which will leave influence to Brexit as it approaches a conclusion.
The DAX ended 15 points lower at 12654 on Thursday. The index initially broke above the resistance at 12684 and surged by 150 points to score a high of 12820 before erasing gains and trading below the 12684 level once again. The 4H RSI reading exited the overbought territory and broke the support trend line thereby suggesting that the DAX may turn lower following its extended rally. It is worth noting that the Daily RSI reading shows a bearish divergence as it failed to create higher high corresponding with that of price. Failure to trade and hold above 12680 would guard the higher resistance at 12720 and lead the DAX to short-term reversal. A sustained move below 12620 would indicate selling pressure and target the lower levels at 12590 and 12500.
Resistance: 12684 /12725