The DAX traded 0.34% higher on Wednesday as trade optimism alongside hopes that the EU would grant Brexit an extension upheld a positive global economic outlook. Today, Germany and the Eurozone publish their respective manufacturing PMI figures both of which are estimated to show an improvement. Apart from economic data, corporate earnings out of European and US companies will bear an influence alongside Brexit headlines as market participants await news on whether an extension would be approved and its subsequent duration.
The DAX managed to record its third consecutive gain this week as it closed 43 points higher at 12798 on Wednesday. The price found support at 12650 and turned higher to attempt a breach of the resistance at 12820. Today, Dax futures managed to trade above the 12820 level and show price drifting higher however the 4H RSI reading is seen forming lower highs thereby indicating that momentum is starting to shift and that it is unlikely that the higher moves would be sustained. Should price action and the RSI readings continue to diverge then the DAX may be in store for a reversal. Look for a sustained move below 12750 to indicate selling pressure while a break below the 12650 support level is required to impair the bullish view. On the other hand, holding above the 12750 level near the 20-period MA would maintain bullish control while a sustained move above 12820 would lead the DAX to the higher resistance at 12890 followed by 12950.
Resistance: 12890 /12950