The DAX ended last week on a bearish note as it declined by 0.46% on Friday following from four days of consecutive gains despite positive economic data. Sentiment towards a provisional US-China deal had catalyzed global equities throughout the week owing to positive headlines such as the most recent claim that the two nations agreed to remove tariffs which President Trump, to markets’ dismay, denied on Friday. Proving once again that trade chatter dominates influence on price action. German and Chinese trade data failed to provide support though both economies showed their trade surplus widened to 19.2 billion and 42.81 billion respectively. However the outlook remains worrisome as the US and China have yet to sign the phase one deal and remove existing tariffs in order to move forward. Today there are no major economic releases and influence on the DAX will remain at the hands of geopolitical headlines.
The DAX closed 60 points lower at 13228 on Friday. The daily RSI reading remains in the overbought territory and Friday’s dip may prove to be brief should price trade above the support at 13200. A trade above the 13260 level is required to indicate buying pressure and lead the DAX to a re-test of the resistance at 13300. On the other hand, a sustained move below 13200 would signal further weakness and target the lower support levels at 13170 followed by 13110 near the 50-period MA.
Resistance: 13260 /13300