The German-blue-chip index rose by 0.09% on Tuesday as risk appetite remained supported by trade optimism which may imminently prove to have reached its peak. Today, Germany and the Eurozone publish services PMI figures which may have a muted impact on the DAX. Sentiment towards the US-China trade situation remains the key-drive of price action however reality may kick in soon; that being that a provisional trade deal has yet to materialize amidst a slowing global economy which will see no end to the trade war anytime soon. Traders should continue monitoring geopolitical headlines to influence direction on the DAX.
The DAX closed 12 points higher at 13148 on Tuesday. The index appears to be consolidating gains as it has yet to trade above the resistance at 13175 and approach the higher level at 13200. A break above 13200 would be required to signal a bullish continuation and bring the high at 13600 into play. The daily RSI reading remains in the overbought territory suggesting that the DAX may be primed for a short-term reversal. Look for a sustained decline below the 13110 level to target the 20-period MA currently at 13075 followed by the support level at 13000. The uptrend should remain intact unless we see price trade below the most recent low at 12790.
Resistance: 13200 /13338