German equities rose on Friday along with trade inspired optimism as US-China trade talks were reportedly constructive and are set to continue this week. In addition, the German unemployment rate fell and retail sales data came in better than expected. On today’s data front, manufacturing data out of Germany and the Eurozone will further reflect economic conditions and influence sentiment on the DAX. Moreover, Germany’s trade dependence on the strength of the Chinese economy should translate into early positive price action on the DAX as manufacturing data out of China showed expansion and boosts risk appetite across global equities.
The DAX index rose by 0.86% to close at 11526 after reaching resistance around 11550. The RSI reading continues to hold above the support trend line and leaves room for further advances in the DAX index should it clear resistance at 11655 and the subsequent 11690/11720 levels. Failure to sustain price action above the 11550 level would lead the index to drift lower towards the support at 11480. Look for a trade below the 20-period MA which has provided near-term support for a sequence of higher lows, to indicate the presence of selling pressure.
Resistance: 11650 /11720