European equities saw positive price action on Tuesday as optimism surrounding prospects of the crucial US-China trade deal alleviated global sentiment and helped the DAX index, sensitive to global trade developments, rise over 1%. Due today is the EU industrial production report which is expected to show contraction and further highlight the Eurozone’s economic slowdown, however trade inspired optimism may dominate market sentiment and extend positive price action in German equities.
The DAX index posted solid gains for a second day to close at 11126 while recovering from last week’s losses. Considering price fell below the 11000 level to a low of 10860 last week, trader’s reaction to the resistance level at 11260 will determine whether the rebound in price action will last. Failure to break through this level will see price retreat to test the support at 11100.
Support: 11100/ 11050
Resistance: 11260/ 11320